International Trade
Advisory Committee System Should Be Updated to Better Serve U.S. Policy Needs Gao ID: GAO-02-876 September 24, 2002In 1974, Congress mandated creation of a private sector advisory system to ensure that representatives from private business and other groups with a stake in trade policy could provide input as negotiations unfolded. The hope was that such involvement would result in trade agreements that Congress could approve with confidence. The law established a three-tier structure of committees to advise the President on overall U.S. trade policy, general policy area, and technical aspects of trade agreements. Four agencies, led by the Office of the U.S. Trade Representative (USTR), currently administer the committee system. According to many negotiators, agency officials, and committee members, the trade policy advisory committee system plays an important role in U.S. trade policy and has made valuable contributions to U.S. trade agreements. Although GAO's survey of committee members found high levels of satisfaction with many aspects of committee operations and effectiveness, more than a quarter of respondents indicated that the system has not realized its potential to contribute to U.S. trade policy. GAO found that consultations could be more timely and meaningful and that the consultation process needs greater accountability. The structure and composition of the committee system have not been fully updated to reflect changes in the U.S. economy and U.S. trade policy. In general, the system's committee structure is largely the same as it was in 1980, even though the focus of U.S. trade policy has shifted from border taxes toward other complex trade issues, such as protection of intellectual property rights and food safety requirements. Leadership direction and administrative support by USTR and the other managing agencies have not been sufficient to ensure that the advisory committee system works reliably. GAO found that negotiators have used inconsistent approaches to solicit committee member views, with some negotiators not consulting with committees at all.
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Director: Team: Phone:GAO-02-876, International Trade: Advisory Committee System Should Be Updated to Better Serve U.S. Policy Needs
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Report to the Ranking Minority Member, Committee on Finance, U.S.
Senate:
September 2002:
INTERNATIONAL TRADE:
Advisory Committee System Should Be Updated to Better Serve U.S. Policy
Needs:
GAO-02-876:
Contents:
Letter:
Results in Brief:
Background:
Negotiators and Agency Officials Believe the Advisory Committee System
Provides Value in U.S. Trade Policy:
Most Members Generally Satisfied with Their Committees, but Cite
Problems with the Consultation Process that Are Hindering the System‘s
Effectiveness:
Advisory Committee System‘s Structure and Composition Do Not Fully
Reflect U.S. Economy and Trade Policy Needs:
System Lacks Sufficient Leadership, Administrative Support to Reliably
Meet Mandated Responsibilities:
Conclusions:
Recommendations for Executive Action:
Matters for Congressional Consideration:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Scope:
Methodology:
Appendix II: Applying Fair Balance Requirement to Trade Advisory
Committees:
FACA Requires Fair Balance on Federal Advisory Committees:
FACA‘s Fair Balance Requirement Applies to Trade Advisory Committees:
Trade Act Not Clear on What Fair Balance Means within Trade Advisory
Committee Structure:
Appendix III: Nomination and Security Clearance Process for Trade
Advisory
Committees:
Appendix IV: Results of GAO‘s Survey of Trade Advisory Committee
Members:
Appendix V: Comparisons of Committee Structure with Trade Indicators:
Appendix VI: Comments from the Office of the United States Trade
Representative:
Appendix VII: Comments from the U.S. Department of Agriculture:
GAO Comment:
Appendix VIII: Comments from the Department of Commerce:
GAO Comments:
Appendix IX: GAO Contact and Staff Acknowledgements:
GAO Contact:
Staff Acknowledgments:
Tables:
Table 1: Percentage of Survey Respondents Who Were Very Satisfied or
Generally Satisfied with Committee Operations:
Table 2: Respondents‘ Opinions about the Amount of Time Devoted to
Various Activities at Committee Meetings:
Table 3: Satisfaction with the Extent to which the Executive Branch
Sought the Committees‘ Advice:
Table 4: Differences among Committee Tiers in Satisfaction with
Committee Operations:
Table 5: Shares of Total U.S. Exports and Imports and Percentage of
Membership by Committee, 2000:
Figures:
Figure 1: Players Involved in U.S. Trade Policy Development:
Figure 2: Trade Advisory Committee Structure:
Figure 3: Formal and Informal Consultation Process for Advisory
Committees:
Figure 4: Industry Share of GDP, 1974-1999:
Figure 5: Major Industry Shares of Membership and Trade, 2000:
Figure 6: Manufacturing Committees with Membership Shares above or
below
Shares of Exports and Imports, 2000:
Figure 7: Committee Membership Levels as a Percentage of Authorized
Membership Levels, Fiscal Year 2001:
Figure 8: Timeline for Authorization of Existing Trade Advisory
Committees:
Figure 9: Average Number of Meetings Per Committee by Tier, Per Year,
Fiscal Years 1999-2001:
Figure 10: Absolute Number of Meetings by Tier, Fiscal Years 1999-2001:
Figure 11: Advisory Committee Appointment Process and Timetable for
USTR, USDA, and Commerce:
Abbreviations:
ACTPN: Advisory Committee for Trade Policy and Negotiations:
ATAC: Agriculture Technical Advisory Committee:
DFO: Designated Federal Official:
FACA: Federal Advisory Committee Act:
IFAC: Industry Functional Advisory Committee:
ISAC: Industry Sector Advisory Committee:
NGO: Nongovernmental organization:
OIAPL: Office of Intergovernmental Affairs and Public Liaison:
USDA: U.S. Department of Agriculture:
USTR: Office of the U.S. Trade Representative:
WTO: World Trade Organization:
Letter September 24, 2002:
The Honorable Charles E. Grassley
Ranking Minority Member, Committee on Finance
United States Senate:
Dear Senator Grassley:
In 1974, Congress mandated creation of a private sector advisory system
to ensure that representatives from private business and other groups
with a stake in trade policy could provide input as negotiations
unfolded. The hope was that such involvement would result in trade
agreements that Congress could approve with confidence. The law, as
amended, established a three-tier structure of committees to advise the
President on overall U.S. trade policy, general policy areas, and
technical aspects of trade agreements. Among other things, the law
requires the President to consult with these committees on a continuing
and timely basis. Four agencies, led by the Office of the U.S. Trade
Representative, currently administer the committee system. Legislation
recently passed by Congress granted the President trade promotion
authority to negotiate trade agreements--previously known as ’fast
track“ negotiating authority--and renewed lapsed portions of the
advisory committee system‘s mandate.[Footnote 1] However, committee
members and executive branch officials participating in the system have
voiced concerns about the current system‘s operation and readiness to
support trade policy.
In light of these concerns, as well as the launch of a major round of
trade talks at the World Trade Organization (WTO) and accelerating
negotiations for regional free trade, you asked us to examine the role,
structure, and operations of the trade advisory committee system to
ensure that it is still poised to meet the objectives set by Congress.
In this report, we examine (1) the system‘s value to U.S. trade policy,
(2) participants‘ level of satisfaction with specific aspects of the
consultation process as well as aspects that participants said could be
improved, (3) the degree to which the system matches the current U.S.
economy and supports U.S. trade policy needs, and (4) the Office of the
U.S. Trade Representative‘s (USTR) and the other agencies‘ management
of the system.
To address these issues, we surveyed 720 of the 735 committee members
about their experiences in the system;[Footnote 2] conducted 168
interviews with every type of participant in the committee process,
including selected committee chairs, members, U.S. negotiators involved
in key trade initiatives, other executive branch officials,
nongovernmental interest groups, and trade experts; and analyzed data
and documents relevant to committee mandates, procedures, activities,
membership, economic size, and trade flows. (For a full description of
our scope and methodology, see app. I.):
Results in Brief:
According to many negotiators, agency officials, and committee members,
the trade policy advisory committee system plays an important role in
U.S. trade policy and has made valuable contributions to U.S. trade
agreements. Officials with whom we met said that the committees are a
unique forum for candid discussion of sensitive trade negotiating
topics and help U.S. trade officials readily tap a wide range of
private sector expertise. U.S. negotiators cited numerous specific
cases of input from advisory committees that helped them secure more
beneficial trade agreements. Our analysis of committee documents found
ample evidence that the U.S. Trade Representative and other executive
branch agencies are informing advisers about developments in U.S. trade
policy and seeking their input, formally and informally, on key trade
initiatives.
While our survey of committee members found high levels of satisfaction
with many aspects of committee operations and effectiveness, more than
a quarter of respondents indicated that the system has not realized its
potential to contribute to U.S. trade policy. We identified three
aspects of the consultation process that could be improved. First,
consultations were not always timely enough to have an impact on U.S.
policy, in part because certain committees have not met at all or meet
irregularly. Second, members and negotiators believed that the
consultations were not always meaningful or useful. In some cases,
tight meeting agendas were not conducive to fully vetting views and
formulating committee advice. In other cases, committees were asked to
comment on complex initiatives but were given little time to review the
initiatives and limited access to key documents. Third, members believe
that the system‘s consultation process needs greater accountability to
ensure that advice is considered. An 8-year lapse of trade negotiating
authority had eliminated the committees‘ channel for reporting to
Congress, and more than a third of the respondents to our survey stated
that executive branch officials are not informing them when there are
’significant departures from advice,“ as the law requires. In addition
to these member concerns, some negotiators believe the committees
cannot provide the type or quality of advice they need.
The structure and composition of the committee system have not been
fully updated to reflect changes in the U.S. economy and U.S. trade
policy. Representation of the services sector has not kept pace with
its growing importance to U.S. output and trade. Certain manufacturing
sectors, such as electronics, have fewer members than their sizable
trade would indicate. In general, the system‘s committee structure is
largely the same as it was in 1980, even though the focus of U.S. trade
policy has shifted from border taxes (tariffs) toward other complex
trade issues, such as protection of intellectual property rights and
food safety requirements. As a result, the system has gaps in its
coverage of industry sectors, trade issues, and stakeholders. On the
industry side, committee rosters are only about 50 percent of their
authorized levels, and some large companies do not participate. On the
policy side, negotiators report that some key issues in negotiations,
such as investment, are not adequately covered. Although nonbusiness
stakeholders such as labor and environmental groups have membership on
certain committees, they report feeling marginalized in the system as a
whole because they are permitted membership on relatively few
committees and perceive difficulty ensuring that their views get
serious consideration. Furthermore, applicable legislation and court
cases do not provide clear guidance about how nonbusiness interests
should participate in the system.
Leadership direction and administrative support by USTR and the other
managing agencies have not been sufficient to ensure that the advisory
committee system works reliably. We found that negotiators have used
inconsistent approaches to solicit committee member views, with some
negotiators not consulting with committees at all. In addition, the
nomination and appointment process is time consuming, making it hard to
replace members or fill representation needs. Committee operations have
been interrupted for 6 months or longer because some agencies failed to
renew committee charters. The result has been to temporarily deny
certain committees input into key negotiations. The burden of
administrative tasks on agencies‘ resources has limited their capacity
to pursue steps that would strengthen the system‘s performance.
Given Congress‘ desire for a standing system to provide the President
with confidential and representative private sector advice, we are
recommending that responsible agencies make changes to strengthen the
advisory committee system‘s capacity to contribute to U.S. trade
policy. Specifically, we recommend that agencies improve the
consultation process, update the system‘s structure and membership, and
upgrade system management. In addition, we suggest that Congress may
wish to consider providing guidance on achieving balance among various
interests in the system and easing certain administrative requirements.
In responding to our draft report, the U.S. Trade Representative and
the Department of Agriculture agreed with our overall findings and
outlined initial steps they are taking to implement our
recommendations. Commerce characterized the report as thorough and
fair, but urged us to make a number of modifications. For example,
Commerce argued that in some cases we underplayed member satisfaction
with the system and it took issue with our conclusions on apparent
mismatches between the committee structure and the current U.S. economy
and agencies‘ administrative capacity. In most cases, we disagreed and
declined to modify this report accordingly.
Background:
As part of its constitutional authority to regulate commerce with
foreign nations, Congress has long delegated to the President authority
to proclaim reciprocal tariff reductions with U.S. trading partners and
has encouraged the President to enter into certain trade agreements
that meet congressionally mandated objectives. Congress established the
trade advisory committee system in Section 135 of the Trade Act of
1974[Footnote 3] as a way to institutionalize domestic input into such
U.S. trade negotiations from interested parties outside the federal
government. This system was considered necessary because of complaints
from some in the business community about their limited and ad hoc role
in previous negotiations. The 1974 law created a system of committees
through which such advice, along with advice from labor and consumer
groups, was to be sought.
In practice, USTR has primary responsibility within the executive
branch for developing U.S. trade policy, and the President has
delegated to USTR the role of leading the trade advisory committee
process. Additional players in developing U.S. trade policy include
other executive branch agencies, particularly the departments of
Commerce and Agriculture; the private sector, including business and
nonbusiness groups; and state and local governments. USTR also
maintains close consultation with Congress.[Footnote 4] The advisory
committee system is one of several ways that USTR obtains input from
the private sector (see fig. 1). In fact, Section 135 of the Trade Act
also requires USTR to provide an opportunity to private organizations
or groups outside the advisory committee system to present their views
on trade issues.[Footnote 5]
Figure 1: Players Involved in U.S. Trade Policy Development:
[See PDF for image]
Source: GAO.
[End of figure]
The system, created in 1974, was originally intended to provide private
sector input to global trade negotiations occurring at that time (the
Tokyo Round). Since then, the original legislation has been amended to
expand the scope of topics on which the President is required to seek
information and advice from ’negotiating objectives and bargaining
positions before entering into a trade agreement“ to the ’operation of
any trade agreement, once entered into,“ and on other matters regarding
administration of U.S. trade policy.[Footnote 6] The legislation has
also been amended to include additional interests within the advisory
committee structure, such as those represented by the services sector
and state and local governments. Finally, the amended legislation
requires the executive branch to inform the committees of ’significant
departures“ from their advice.[Footnote 7]
The trade advisory committees are subject to the requirements of the
Federal Advisory Committee Act (FACA),[Footnote 8] with limited
exceptions pertaining to holding public meetings and public
availability of documents.[Footnote 9] One of FACA‘s requirements is
that advisory committees be fairly balanced in terms of points of view
represented and the functions the committees perform.[Footnote 10] FACA
covers most federal advisory committees and includes a number of
administrative requirements, such as requiring rechartering of
committees if they are to continue for more than 2 years.
The structure of the trade advisory committee system consists of three
tiers, with the top tier directed by law to provide ’overall policy
advice,“ the second tier to provide ’general policy advice,“ and the
third tier to provide ’technical advice and information.“ However,
Section 135 of the Trade Act does not establish any formal relationship
among these tiers, nor does it authorize the first tier to exercise any
control over the other two. USTR, working jointly with the other
relevant executive departments, has the discretion to create, change,
and terminate committees in the second and third tiers.
The system comprises about 735 advisers spread across 34
committees,[Footnote 11] with the bulk of the advisers and committees
in the third, technical tier. This tier consists of 17 industry sector
advisory committees (ISACs), 4 industry functional advisory committees
(IFACs), a committee of ISAC and IFAC chairpersons, and 5 agricultural
technical advisory committees (ATACs). The second tier currently
consists of five policy advisory committees. The first tier consists of
just one committee, the Advisory Committee for Trade Policy and
Negotiations (ACTPN), whose members are appointed by the President.
Figure 2 illustrates the committee structure.
Figure 2: Trade Advisory Committee Structure:
[See PDF for image]
Source: GAO.
[End of figure]
The advisory committees are administered by USTR, which assumes a
leadership role, along with the departments of Agriculture, Commerce,
and Labor. USTR is responsible for administering ACTPN and three of the
tier-2 Policy Advisory Committees, and shares responsibility with the
other agencies for administering the rest of the committees. The
Department of Commerce co-administers the majority of these committees-
-the ISACs, IFACs, and the Committee of Chairs.[Footnote 12] The
Department of Agriculture (Agriculture) coadministers six others--the
ATACs and the tier-2 Agricultural Policy Advisory Committee. The
Department of Labor (Labor) is responsible for coadministering a tier-
2 Policy Advisory Committee. The Environmental Protection Agency (EPA)
plays a supportive role in the activities of the tier-2 Trade and
Environment Policy Committee (TEPAC) but does not administer it
directly.
Negotiators and Agency Officials Believe the Advisory Committee System
Provides Value in U.S. Trade Policy:
The advisory committee system‘s unique features give it an important
role in U.S. trade policy. Many negotiators use the system and report
that the committees have made important contributions to successful
U.S. trade agreements. Our analysis of documents indicates that
committees have been given numerous opportunities to provide formal
advice at committee meetings and through informal channels.
Committee System Has Unique Features and Makes Important Contributions:
The advisory committee system is unique in U.S. trade policy because it
provides a forum in which business and other interested groups can
consult confidentially with and provide advice to the executive branch
on trade negotiations, U.S. trade policy, and implementation of trade
agreements. The formal nature of advisory meetings helps ensure that
representatives of the private sector and other groups have regular
access to officials engaged in U.S. trade policy. Further, the system
provides government officials with a body of private sector experts
with whom they can develop an ongoing dialogue. Since USTR‘s
administrative procedures for the advisory committees require advisers
to obtain security clearances before participating, the committees
offer an environment conducive to discussing sensitive negotiating
information.
Many participants said the advisory committee system serves an
important role in U.S. trade policy. A former USTR official and current
committee member termed the advisory committee system ’one of the great
strengths of U.S. trade policy.“ Among the comments made by negotiators
whom we interviewed and members responding to our survey were that the
formal advisory committee system is often preferable to more ad hoc
means of obtaining input because it is institutionalized and seeks to
be representative. Moreover, they said, the system provides assurance
to Congress that domestic interests with a stake in trade matters have
a voice when trade policy is formulated and will support the final
agreements. It thus helps make the executive branch accountable to
Congress and, ultimately, to the American public. According to multiple
responses, the system strengthens the U.S. bargaining position by
bringing to bear on-the-ground perspective and information from the
private sector that the U.S. government lacks; establishing a clear set
of U.S. priorities and fuller appreciation of various American
interests; and enabling the United States to present a unified front
when it faces foreign nations at the negotiating table. Without the
system, some participants commented, U.S. negotiators would be
operating in a vacuum and businesses would be unable to effectively
resolve with foreign governments issues that only the U.S. government
can pursue. The bottom line, negotiators and members agree, is that
when it works properly, the system results in better trade agreements.
Not only does it help the United States achieve commercial benefits, it
can help keep the trading system vital and responsive to actual needs.
Agency officials also cited the system‘s value and contributions to
U.S. trade policy. According to USTR, the advisory committee process
was extremely successful during negotiations (1) on China‘s accession
to the WTO; (2) multilateral agreements on information technology,
financial services, and basic telecommunications; (3) the Uruguay Round
of negotiations that led to establishment of the WTO; (4) as well as
regional initiatives such as the North American Free Trade Agreement,
the Summit of the Americas, and the Asia-Pacific Economic Cooperation
forum. Of the 27 USTR trade negotiators whom we interviewed, 18
indicated that they had obtained useful advice from the system, as did
most of the 12 Commerce officials we interviewed. They cited numerous
specific situations where advisory committee input had been helpful to
negotiations. For example, an Assistant U.S. Trade Representative
indicated that the advisory committees are playing a vital role in
identifying market-opening priorities for the more than 140 nations
currently involved in WTO negotiations. A Department of Commerce
official described a committee as instrumental in helping monitor
implementation of China‘s accession commitments to the WTO. A USDA
negotiator said a committee was helpful in setting the tone regarding
the language on tariff reductions in the comprehensive U.S. agriculture
proposal to the WTO. A USTR negotiator reported that a committee helped
develop a position on defining ’international standards“ in the WTO‘s
Technical Barriers to Trade Agreement and helped gain the international
community‘s support for the U.S. proposal, expediting acceptance of
U.S. goods in foreign markets.
Committee members also value the advisory committee system and devote
considerable resources to participating in it on a voluntary basis.
Just over one-half of committee members live outside of Washington,
D.C., and pay their own travel expenses to attend committee
meetings.[Footnote 13] Further, when the Department of Commerce renewed
the charter for the ISACs and IFACs in March 2002, more than 80 percent
of those members continued.[Footnote 14] Members whom we surveyed
highlighted numerous benefits of committee membership, including access
to USTR and other agency officials, insights into other members‘ views,
and face-to-face dialogue with all members. Parties outside the system,
such as U.S. subsidiaries of foreign-owned businesses and
nongovernmental organizations (NGO), have sought representation on the
committees, arguing that they should not be excluded from such an
influential system.[Footnote 15]
The Executive Branch Consults with Advisory Committees through Formal
and Informal Channels:
Our analysis of committee documents found ample evidence that USTR and
other executive branch agencies are consulting committees on a wide
range of trade initiatives at formal committee meetings. For example,
agendas for the committee meetings during the 3 years leading up to the
4TH WTO Ministerial, held in Doha, Qatar, in November 2001, listed the
ministerial 60 times. Twenty of the advisory committees discussed U.S.
preparations for the ministerial. Also, during fiscal years 1999
through 2001, different elements of the Free Trade Area of the Americas
agreement were listed as items on more than 190 meeting agendas, at
meetings of almost every committee.
Such scheduled advisory committee meetings, usually held in Washington,
D.C., are the formal channels for the executive branch to consult with
the private sector advisory committees. In fiscal year 2001 there were
approximately 110 formal meetings across the committee system.[Footnote
16] The number of meetings varied considerably by committee. The
meetings generally lasted 3 to 5 hours. According to our analysis,
about 80 percent of the meetings for fiscal years 1999 to 2001 were
closed to the public.[Footnote 17] Negotiators and other trade
officials attend portions of the meetings, each in turn briefing,
discussing, and consulting with the committee. The private sector
committee chair and the managing agency‘s designated federal official
(DFO)[Footnote 18] generally schedule meetings and select the agenda
topics, although occasionally negotiators seek out specific committees
to consult on a particular topic. Consultation during meetings is oral,
but some committees send their positions in writing to USTR and the
corresponding secretary or head of the agency. Many committee chairmen
said their committees seek to provide consensus advice, which may
include dissenting opinions. For the first-and second-tier committees,
only classified transcripts were kept until recently.[Footnote 19] For
the third-tier committees, DFOs prepare classified minutes of closed
meetings for internal committee use only, as well as unclassified
public summaries.
In addition to formal meetings, USTR, Commerce, USDA, and others
informally request advice from committee members through faxes, E-
mails, ad hoc meetings, and teleconferences when they need a rapid
response. However, committee members consulted at ad hoc meetings or
through other means may provide advice only as personal opinions
because, in keeping with FACA rules, formal committee advice generally
can only be provided through formal committee meetings. In some cases,
this informal advice is solicited by a request from a negotiator to the
coordinating offices at USTR and other agencies, which then transmit
the request to all advisers. In other cases, direct contact between
negotiators and selected committee members occurs. Regardless of how
contact is initiated, members typically provide advice directly to the
relevant official and no central record is kept.
Nevertheless, our review of existing agency records indicates that such
informal consultation is active. In fiscal year 2001, USTR scheduled at
least nine ad hoc meetings, mostly teleconferences or in-person
meetings, to which trade advisers were invited an average of 2 to 3
days in advance.[Footnote 20] During this same period, USTR and
Commerce faxed or E-mailed approximately 63 requests for
advice,[Footnote 21] usually addressed to the entire advisory system
membership or all of the industry sector and functional committees;
according to our analysis of available data, the advisers had an
average of 7.5 days to respond. Figure 3 shows the different processes
for obtaining formal and informal advice from the committees.
Figure 3: Formal and Informal Consultation Process for Advisory
Committees:
[See PDF for image]
Source: GAO.
[End of figure]
Most Members Generally Satisfied with Their Committees, but Cite
Problems with the Consultation Process That Are Hindering the System‘s
Effectiveness:
Most advisory committee members are satisfied with key aspects of the
advisory process. However, some would prefer to be included more fully
in the deliberations before actual trade policies are made, and many
cited several problems with the consultation process that have hindered
the system‘s effectiveness. In addition, accountability for the use or
consideration of advice could be improved.
Members Reported Varying Levels of Satisfaction with Their Advisory
Committee:
More than 60 percent of the members who responded to our survey
reported that they were very satisfied or generally satisfied[Footnote
22] with 11 of the 16 areas of committee composition, operations, and
effectiveness listed in table 1. In addition, about half of the
committee members responding to our survey indicated that the system is
fulfilling its statutory mandate to a ’very great extent“ or ’a great
extent.“ The areas with the greatest levels of satisfaction (very or
generally satisfied) were the knowledge of government speakers (85
percent), the committee‘s opportunity to ask questions of government
officials (84 percent), and the opportunity for members with dissenting
views to provide input at meetings (79 percent). The areas with the
lowest levels of satisfaction (very or generally satisfied) were the
executive branch‘s response to committee advice (39 percent), the use
of technology to facilitate meetings (39 percent), and the time it
takes to appoint new committee members (16 percent), which had by far
the lowest level of satisfaction.
Table 1: Percentage of Survey Respondents Who Were Very Satisfied or
Generally Satisfied with Committee Operations:
1) The knowledge of the government speakers who brief your committee;
Percentage of all responses marked ’very satisfied“ or ’generally
satisfied“: ; 85%.
2) Your committee‘s opportunity to ask questions of government
officials at meetings; Percentage of all responses marked ’very
satisfied“ or ’generally satisfied“: ; 84.
3) The opportunity for committee members with dissenting views to
provide input at meetings; Percentage of all responses marked ’very
satisfied“ or ’generally satisfied“: ; 79.
4) The support provided by your Designated Federal Officer (DFO);
Percentage of all responses marked ’very satisfied“ or ’generally
satisfied“: 75.
5) The topics on which your committee is briefed by government
speakers; Percentage of all responses marked ’very satisfied“ or
’generally satisfied“: ; 75.
6) Amount of notice your committee receives for meetings; Percentage of
all responses marked ’very satisfied“ or ’generally satisfied“: 72.
7) Representation of your business sector in the overall committee
structure; Percentage of all responses marked ’very satisfied“ or
’generally satisfied“: ; 72.
8) Your committee‘s opportunity to provide advice at meetings;
Percentage of all responses marked ’very satisfied“ or ’generally
satisfied“: 70.
9) The clarity of your committee‘s operating rules and procedures;
Percentage of all responses marked ’very satisfied“ or ’generally
satisfied“: 65.
10) The support provided by USTR; Percentage of all responses marked
’very satisfied“ or ’generally satisfied“: 64.
11) The balance of business representation in your committee (e.g., by
region, type of company, and company size); Percentage of all responses
marked ’very satisfied“ or ’generally satisfied“: ; 63.
12) Your committee‘s opportunity to provide formal advice outside of
meetings; Percentage of all responses marked ’very satisfied“ or
’generally satisfied“: ; 54.
13) The degree of attention the executive branch pays to your
committee‘s trade issues; Percentage of all responses marked ’very
satisfied“ or ’generally satisfied“: ; 45.
14) The executive branch‘s response to the advice your committee
provided; Percentage of all responses marked ’very satisfied“ or
’generally satisfied“: ; 39.
15) The use of technology to facilitate meetings; Percentage of all
responses marked ’very satisfied“ or ’generally satisfied“: 39.
16) The time it takes to appoint new members to your committee;
Percentage of all responses marked ’very satisfied“ or ’generally
satisfied“: 16.
Source: GAO analysis of survey responses.
[End of table]
Despite reporting general satisfaction with many aspects of the system,
more than a quarter of survey respondents felt that the system has not
realized its potential contribution to U.S. trade policy (see app. IV,
question 23). Many members responding to our survey supported actions
to improve committee operations. Through our survey, member interviews,
and document analysis, we identified several problems with the (1)
timeliness, (2) quality, and (3) accountability of consultations
between the executive branch and the committees. These problems have,
at times, limited member input into and influence over trade policy.
Some of these problems were particularly acute for specific issues or
committees.
Consultations Are Not Always Timely because They Occur after Decisions
Are Made:
The timeliness of consultations was a concern to many advisers, who
stated that consultations sometimes occur too late to affect policy.
Overall, 30 percent of respondents felt that the executive branch
scheduled its consultations so that the committees‘ advice could be
used in trade negotiations to ’some or little extent“ or ’no extent,“
while only 25 percent of the respondents believed the consultations
were scheduled appropriately to a ’very great extent“ or ’great
extent.“
[Footnote 23] Members whom we surveyed as well as interviewees reported
that advice is often sought after the executive‘s policy direction is
already set. Several members reported that, in the past 5 years, the
tendency has been for negotiators to come to committee meetings and
say,
’Here is the agreement, what do you think?“ In one case that we
documented,
the administration did not consult with the President‘s overall policy
advisory committee--ACTPN--before submitting its proposed
international trade agenda to Congress, including the principles to be
included in Trade Promotion Authority legislation. The staff liaisons
for ACTPN and TEPAC were only briefed on the matter the day after the
agenda was submitted. Furthermore, the advisory committees were not
consulted before the Clinton administration announced its decision to
pursue a Free Trade Agreement with Singapore. The announcement provoked
considerable concern across the private sector for a variety of
reasons, not least because the original proposed time frame of
completing the negotiations within 6 weeks would have allowed little
time for advisers to provide input.
Another problem with timeliness cited by members is that certain
committees meet infrequently. USTR, Commerce, and USDA procedures
generally indicate that agency officials are responsible for calling
meetings. The problem of meeting frequency is particularly acute for
the first-and second-tier committees, which averaged 1.7 and 2.5
meetings each year, compared with the third-tier committees, which met
an average of 3.7 times each year. The ACTPN, which consists of CEO-
level advisers and is designed to provide overall policy advice, met
twice in fiscal years 2000 and 2001. It did not meet for more than 16
months between March 2000 and July 2001. During that period, the Jordan
Free Trade Agreement--which broke new ground by including labor and
environmental provisions in the text of a U.S. trade agreement for the
first time--was finalized without formal executive branch consultation
with the ACTPN.[Footnote 24] Members and negotiators reported that the
lack of regular meetings was a barrier to the effective functioning of
the committees.
Although Section 135 of the Trade Act requires the executive branch to
consult with the committees ’on a continuing and timely basis“ and ’to
the maximum extent feasible . . . before the commencement of
negotiations,“ the agencies involved have not adopted guidelines to
implement these directives. For example, Commerce‘s and USTR‘s
procedures and rules for managing these committees do not address the
principle of timeliness or consulting to the maximum extent feasible.
USDA‘s procedures also do not refer to these issues, but in practice,
the agency has developed a calendar of key negotiation events to use in
scheduling advisory committee meetings in an effort to ensure that
consultations are timely.
Participants Believe the Quality of Consultations Is Not Always
Meaningful:
Committee members, agency officials, and negotiators reported several
problems that sometimes affect the quality and meaningfulness of
consultations. These problems included too little time for discussion
at meetings, limited access to background documents, insufficient
consultation on certain issues, and poor participation by some
negotiators.
Insufficient Time for Consultations at Meetings:
In survey responses and interviews, many committee members said that
they did not have enough time to discuss issues or provide advice at
committee meetings. While respondents to our survey were broadly
satisfied with the amount of time spent on presentations by USTR and
the committees‘ principal agencies, 42 percent of the respondents
reported that not enough time was devoted to providing advice, 43
percent reported that not enough time was spent on members‘ discussing
trade issues, and 39 percent said that not enough time was devoted to
presentations by other executive branch agencies (see table 2).
Commerce officials confirmed that they were aware that the amount of
time available for discussion is an issue, but explained in agency
comments that, because of the costs and travel time associated with
ISAC and IFAC meetings and the number of issues to be discussed,
meeting agendas are often packed. Negotiators stated that this imposes
practical constraints on the time devoted to each agenda item.
According to a USDA official, the agency is carefully reviewing the
number of items on committee agendas and scheduling full-day meetings
for its ATACs to ensure that there is sufficient time for member
discussion.
Table 2: Respondents‘ Opinions about the Amount of Time Devoted to
Various Activities at Committee Meetings:
a) Presentations by USTR; Too much: 6.8%; About the right amount:
71.0%; Too: 19.8%; No basis to judge/ no answer: 2.3%.
b) Presentations by your committee‘s principal agency; Too much: ; 8.5;
About the right amount: ; 70.4; Too: ; 14.5; No basis to judge/ no
answer: ; 6.5.
c) Presentations by other executive branch agencies; Too much: ; 3.5;
About the right amount: ; 41.3; Too: ; 39.4; No basis to judge/ no
answer: ; 15.8.
d) Committee providing advice to all executive branch agencies; Too
much: ; 1.0; About the right amount: ; 33.8; Too: ; 41.9; No basis to
judge/ no answer: ; 23.3.
e) Committee member discussion of trade issues; Too much: ; 1.9; About
the right amount: ; 51.3; Too: ; 42.6; No basis to judge/ no answer: ;
4.4.
Source: GAO analysis of survey responses. Also see appendix IV,
question 2.
[End of table]
Limited Access to Documents:
Limited access to certain background documents also affects the quality
of consultations. USTR often provides national security classified and
trade sensitive documents, such as proposed negotiating objectives or
text of draft agreements, to committee members for comment. However,
access to these documents--which are kept in Washington, D.C., in
secured reading rooms--is often not feasible for advisers who live
outside of the Washington, D.C., area, and not always convenient for
advisers who work in Washington. Numerous survey respondents complained
that current arrangements for reviewing such documents are
inadequate.[Footnote 25] Officials and members said that being able to
access documents electronically, such as through an encoded Internet
site, would improve the quality of committee advice. In agency
comments, USTR, Commerce, and USDA indicated they are exploring options
for electronic access, but stressed that safeguarding sensitive or
classified negotiating material must remain paramount.
Taking a detailed look at these documents is important to members
because it can materially affect negotiating outcomes. A Commerce
official related an example pertaining to the Chile FTA, when ISAC
members felt they had not had an opportunity to look at the negotiating
text because it was put into the reading room at the last minute before
a holiday. A subcommittee of the ISAC (8 to 10 people, mostly lawyers)
reviewed the text line by line at the Commerce reading room and
provided numerous changes to USTR, which were presented to the
Chileans. The Commerce official noted that what happens with the Chile
negotiations is considered extremely important because it will set a
precedent for future trade agreements.
Consultation on Certain Issues Is Insufficient, According to Some
Members:
Consultation on certain issues appears to be particularly problematic.
First, although Section 135 of the Trade Act requires consultation
regarding ’the development, implementation, and administration“ of U.S.
trade policy, 30 percent of respondents reported that they were
dissatisfied (’very dissatisfied“ or ’generally dissatisfied“) with the
extent of consultation on implementation of trade agreements, 26
percent were dissatisfied with consultation on bilateral trade
negotiations, 25 percent were dissatisfied with consultation on general
trade policy issues, and 23 percent were dissatisfied with consultation
on multilateral trade negotiations (see table 3). In one case, the
administration prepared and issued, without first consulting the top-
tier committees, a comprehensive report reviewing the WTO‘s operation
during its first 5 years, advocating that the United States should
continue participation in the WTO. Advisers were only briefed on the
126-page report‘s contents 5 days after the date it was signed by the
USTR.[Footnote 26]
Table 3: Satisfaction with the Extent to which the Executive Branch
Sought the Committees‘ Advice:
a) General trade policy issues; Satisfied: 51.3%; Neither satisfied nor
dissatisfied: 18.4%; Dissatisfied: 24.7%; No opinion/: 5.7%.
b) Multilateral trade negotiations (World Trade Organization - WTO);
Satisfied: ; ; 54.3; Neither satisfied nor dissatisfied: ; ; 16.5;
Dissatisfied: ; ; 23.1; No opinion/: ; ; 6.1.
c) Bilateral trade negotiations; Satisfied: 49.1; Neither satisfied nor
dissatisfied: 18.6; Dissatisfied: 25.8; No opinion/: 6.5.
d) Implementation of trade agreements; Satisfied: ; 34.6; Neither
satisfied nor dissatisfied: ; 26.8; Dissatisfied: ; 30.1; No opinion/:
; 8.5.
e) Other (please specify); Satisfied: 6.0; Neither satisfied nor
dissatisfied: 6.4; Dissatisfied: 5.0; No opinion/: 82.5.
Note: Satisfied included responses marked ’very satisfied“ or
’generally satisfied.“ Dissatisfied included responses marked ’very
dissatisfied“ or ’generally dissatisfied.“ :
Source: GAO analysis of survey responses. Also see appendix IV,
question 3.
[End of table]
Second, consultations with the tier-1 and tier-2 policy committees have
not been satisfactory, some respondents said.[Footnote 27]Table 4
illustrates differences in tiers‘ satisfaction rates for selected
aspects of committee operations for those who responded to our survey.
Table 4: Differences among Committee Tiers in Satisfaction with
Committee Operations:
1) The knowledge of the government speakers who brief your committee;
Tier 3: ; 87%; Tier 2: ; 80%; Tier 1: ; 84%.
2) Your committee‘s opportunity to ask questions of government
officials at meetings; Tier 3: ; 86; Tier 2: ; 77; Tier 1: ; 71.
3) The opportunity for committee members with dissenting views to
provide input at meetings; Tier 3: ; 82; Tier 2: ; 71; Tier 1: ; 68.
4) The support provided by your Designated Federal Officer (DFO); Tier
3: ; 78; Tier 2: ; 64; Tier 1: ; 58.
5) The topics on which your committee is briefed by government
speakers; Tier 3: ; 84; Tier 2: ; 49; Tier 1: ; 36.
6) Amount of notice your committee receives for meetings; Tier 3: ; 78;
Tier 2: ; 52; Tier 1: ; 52.
7) Representation of your business sector in the overall committee
structure; Tier 3: ; 78; Tier 2: ; 49; Tier 1: ; 52.
8) Your committee‘s opportunity to provide advice at meetings; Tier 3:
; 72; Tier 2: ; 63; Tier 1: ; 61.
9) The clarity of your committee‘s operating rules and procedures; Tier
3: ; 71; Tier 2: ; 49; Tier 1: ; 36.
10) The support provided by USTR; Tier 3: 68; Tier 2: 50; Tier 1: 58.
11) The balance of business representation in your committee (e.g., by
region, type of company, and company size); Tier 3: ; ; 68; Tier 2: ; ;
45; Tier 1: ; ; 45.
12) Your committee‘s opportunity to provide formal advice outside of
meetings; Tier 3: ; 57; Tier 2: ; 38; Tier 1: ; 48.
13) The degree of attention the executive branch pays to your
committee‘s trade issues; Tier 3: ; 47; Tier 2: ; 36; Tier 1: ; 39.
14) The executive branch‘s response to the advice your committee
provided; Tier 3: ; 42; Tier 2: ; 29; Tier 1: ; 38.
15) The use of technology to facilitate meetings; Tier 3: 40; Tier 2:
33; Tier 1: 36.
16) The time it takes to appoint new members to your committee; Tier 3:
; 18; Tier 2: ; 10; Tier 1: ; 10.
Source: GAO analysis of survey results.
[End of table]
At the tier 1 ACTPN, as discussed above, lack of meetings and timely
consultation were additional concerns. Although the tier-2 Labor
Advisory Committee‘s (LAC) formal steering committee met six times in
1999, six times in 2000, and three times in 2001, the full committee
did not meet at all between 1994 and 2002. Steering Committee Members
whom we interviewed felt that USTR consulted them more out of
obligation rather than to obtain advice. One member added that USTR has
treated the committee like a ’dissent group“ and did not provide the
same level of briefings as it did to other advisory committees.
Although members singled out a few USTR negotiators for their
willingness to listen to the committee‘s views, USTR acknowledges that
it did not even have an official liaison to the LAC between 1993 and
2001. None of the labor respondents to our survey reported that they
were satisfied with the degree of attention the executive branch paid
to their committee‘s issues or the executive branch‘s response to the
committee‘s advice.[Footnote 28] Further, members of the tier-2 Trade
and Environment Policy Advisory Committee, comprising business and
environmental interests, generally agreed that the committee had not
been a successful vehicle for addressing environmental aspects of trade
policy. While members and negotiators said that the committee made
significant contributions to the development and implementation of
President Clinton‘s executive order regarding the review of
environmental implications of trade agreements, many members cited
frustrations over the committee‘s inability to provide advice on other
environmental policy issues. Few recognized environmental
organizations still participate in the committee, and some members
reported that the diverse interests represented in the group meant they
had difficulty reaching agreement and providing clear advice.[Footnote
29] Finally, despite USTR‘s efforts to convene meetings of the tier-2
committee designed to address the trade issues of concern to state and
local governments, the Intergovernmental Policy Advisory Committee met
only once in fiscal year 2000 and once in fiscal year 2001, both via
telephone conference calls. Both members and negotiators reported that
the lack of regular meetings was a barrier to the optimal functioning
of the committees.
Third, members and negotiators believe the system‘s capacity for cross-
fertilization among committees should be strengthened. Although
functional committees on issues such as customs and standards have been
established and are supposed to include representatives from industry
committees, participation by such representatives is reported to be
limited. Many issues--such as antidumping, biotechnology, and
transparency in trade regulation--cut across several committees, but
the system‘s capacity to handle them is limited. A negotiator for
antidumping, for example, generally consults only with the ferrous ores
and metals committee (ISAC 7), which includes steel, on such matters.
Although FACA and Section 135 of the Trade Act do not preclude agencies
from consulting with a cross-section of members on such issues, USTR
and Commerce have not generally taken advantage of this opportunity.
Consulting with members from different committees on an ad hoc basis
also would not produce the formal committee advice negotiators prefer.
Some mechanisms for cross-fertilization already exist. A Committee of
Chairs of the ISACs and IFACs is empowered to provide collective advice
and provide a cross-section of views. Joint meetings of committees have
also been convened. For example, members of the labor committee reacted
favorably to an initiative by the USTR services negotiator to conduct a
joint meeting of the services and labor committees to discuss the issue
of temporary entry of foreign workers into the United States. Survey
respondents supported additional steps to better address cross-cutting
issues, such as sharing meeting agendas and recommendations--an idea
that USDA is exploring.
Officials and Members Indicate Limited Involvement by Some Negotiators:
Some agency officials and committee members believe that the quality of
consultations suffers because USTR is not as engaged as it should be
with the advisory process. While 88 percent of the members responding
to our survey supported (’strongly support“ or ’generally support“)
actions to ensure that USTR officials attend committee meetings on a
regular basis (see app. IV, question 18), we found that some committees
have had little or no contact with USTR. For example, although the head
of the USTR office that manages the advisory committee system said the
office works actively to ensure that USTR‘s negotiators consult with
the advisory committees, several DFOs told us that arranging for USTR
negotiators to meet with their committees is one of their most
difficult tasks. In one example, two DFOs said they had never met their
USTR liaison, nor had they been able to arrange for the liaison to
attend their committees‘ meetings. One of these DFOs added that,
despite attempts, they have not been able to identify anyone at USTR
who covers their issues, and, consequently, no one from USTR has
attended the last five committee meetings. Even obtaining negotiating
calendars is difficult, another official reported, making it hard to
ensure that committee meetings are scheduled to support trade policy
demands.
Our analysis of documents provided by USTR revealed that USTR
negotiators have not been actively working with some committees.
Attendance records do not indicate who was present for what portions of
committee meetings. As a proxy for this data, we reviewed scheduled
speakers at tier-3 committee meetings in fiscal years 1999 to 2001. We
found that, on average, USTR negotiators were scheduled to brief
committees on 42 percent of the topics raised at the meetings. However,
for 10 of the tier-3 committees, the USTR negotiators were scheduled to
brief on 32 percent or fewer of the topics discussed.[Footnote 30] USTR
argues that at tier-3 committee meetings the most knowledgeable speaker
is often an employee of another agency, not a USTR official, because
that agency works most closely with the technical information that is
important to the committees. However, a perceived lack of attention by
USTR was a source of concern to some members, who believe that the
committee system was intended as a mechanism for negotiators to obtain
advice on trade policy and agreements. For example, a committee
chairman told us that a USTR negotiator had not been meeting with its
committee and put forward a tariff proposal in ongoing FTA negotiations
that placed the committee‘s product in the longest phase-out category.
However, because many U.S. producers now import, the committee actually
favors lowering tariffs more rapidly.
Seven of the 27 USTR negotiators with whom we met stated that they
prefer to obtain advice outside the system because advisory committees
cannot provide the type or quality of advice that they need. For
example, three of the seven negotiators handle bilateral issues with
key trading partners and shared this view. One negotiator said that the
committees could not provide guidance on cross-cutting regulatory
issues, so he speaks to associations or key companies that can provide
the necessary advice. The negotiator also said that the committees
generally do not provide timely, targeted responses orally or on paper.
The second negotiator does not work with the ISACs or IFACs at all and,
instead, uses informal contacts to obtain industry input. She explained
that the ISACs are too broad to assist with the detailed issues she
handles in bilateral trade negotiations. The third negotiator agreed
that the ISACs were most useful when dealing with major, comprehensive
negotiations like the Uruguay trade round. She had not used the system
very much in the past 4 years and stated that, in her opinion, the
system was not designed to handle the specific disputes, often
involving litigation, that dominate bilateral trade relations. One of
the two USTR agriculture negotiators we interviewed said the committees
these negotiators work with often fail to advance policy because they
do not narrow differences among members‘ competing interests. A senior
industry negotiator, meanwhile, indicated that the wealth of
information she obtains through informal channels is more helpful than
advisory committee input.
Consultation Process Provides Limited Accountability and Means to
Ensure Consideration and Use of Advice:
The committee system provides limited accountability to ensure that
committee positions on trade negotiating objectives are considered, as
called for in Section 135 of the Trade Act. Prior to January 15, 1994,
trade advisory committees affected by certain bilateral or multilateral
trade negotiations were required to report to the President, Congress,
and USTR at the conclusion of negotiations.[Footnote 31] This
requirement was linked to legislation that gave the President the
authority to negotiate certain trade agreements and submit them for
congressional approval under expedited legislative procedures. The
reporting requirement lapsed when the negotiating authority expired in
1994 and was not renewed until the recent passage of the Trade Act of
2002, which granted the President Trade Promotion Authority.[Footnote
32] According to a former USTR official, this lapsed requirement was an
essential element in the trade advisory committee process because it
assured Congress that the executive branch had sought and considered
private sector advice. Without this reporting requirement, there was
limited accountability in the advisory committee system.
Moreover, mechanisms for tracking and distributing committee advice to
senior agency officials are not routine or reliable. Instead, agency
officials report that advice is transmitted through diffuse channels
that range from formal to informal. At the formal end of the spectrum,
there is no requirement that advisory committee input be sought before
USTR officials submit documents on U.S. trade policy for interagency
clearance by the Trade Policy Staff Committee. Although such documents
sometimes include a section on private sector views, our examination of
selected documents drafted by USTR in 2000 to 2002 revealed that many
did not acknowledge solicitation or use of advisory committee input.
The problems of tracking and distributing committee advice are
aggravated bathe predominance of oral, nonconsensus committee advice
offered during discussions at meetings. While oral advice from a range
of perspectives can be valuable, it does not provide as clear guidance
as written, consensus advice, which is easier to track and respond to.
Commerce‘s training manual for DFOs notes that ’advisors should be
encouraged to provide advice in writing, as advice imparted at meetings
is often not captured for follow-up and is difficult to document.
Members often incorrectly assume that resolutions made at meetings are
passed to action officials by the DFO or that minutes are widely
circulated in a timely manner.“:
Questions have been raised about how responsive agencies are to written
committee advice. A number of chairmen felt such advice received more
serious consideration, but several chairmen expressed frustration to us
about nonsubstantive or untimely replies to their committees‘ letters.
One Commerce DFO stated that, at Commerce, committee letters are not
always sent to officials responsible for the issues involved and
instead go up the administrative chain and end up in a bureaucratic
’black hole“; another DFO reported that the letters from the committee
on which he serves have not been answered. Commerce denies that this is
typical, indicating that committee letters are considered controlled
correspondence that involves distribution of the incoming letter and
review of the draft reply by responsible officials. Although officials
at Commerce told us that it is common to send pro forma, rather than
substantive, responses to committee letters, they noted in agency
comments that this is generally because final U.S. policy has not been
decided. USDA recently initiated a practice of summarizing resolutions
made and sensitive issues raised at advisory committee meetings for
senior USDA and USTR officials in an effort to improve agency awareness
of and accountability for committee advice.
Finally, Section 135(i) of the Trade Act requires the executive branch
to inform committees of ’significant departures“ from committee advice.
However, 41 percent of survey respondents reported that agency
officials informed committees less than half of the time when their
agencies pursued strategies that differed from committee input; only 22
percent reported that they were always or almost always informed of
significant departures from committee advice (see app. IV, questions 8
and 9). About 86 percent of the respondents reported that they would
support obtaining more feedback from USTR (see app. IV, question 18).
Advisory Committee System‘s Structure and Composition Do Not Fully
Reflect U.S. Economy and Trade Policy Needs:
Mismatches between the advisory committee system and the U.S. economy
and trade policy issues suggest that the system is not positioned to
provide the executive branch with all the advice it needs or to assure
Congress that negotiated agreements are fully in U.S. interests. While
most U.S. agricultural and industry sectors are represented in the
committee structure, the composition of the system does not
proportionally match each sector‘s economic significance. Also, some
specific industry committees have gaps in coverage. The structure of
the system has not evolved fully to address new trade policy issues and
stakeholders, and incorporating nonbusiness groups has been difficult.
Major Industry Sectors Represented but Membership Composition Not in
Balance with Economy:
In the 28 years since the advisory system‘s creation, the U.S. economy
and trade have shifted toward services and high-technology industries
(see fig. 4). However, membership composition and the number of
committees that comprise the system‘s structure are still heavily
weighted toward the agriculture and manufacturing sectors (see fig. 5).
In 1974, the committee structure was largely designed to enable the
private sector to provide input on tariff negotiations, the principal
issue in multilateral trade negotiations at that time.
Figure 4: Industry Share of GDP, 1974-1999:
[See PDF for image]
Source: GAO analysis.
[End of figure]
Figure 5: Major Industry Shares of Membership and Trade, 2000:
[See PDF for image]
Source: GAO analysis.
[End of figure]
To determine whether the advisory committee system‘s structure and
composition reflect the current U.S. economy, we examined calendar year
2000 U.S. industry sector trade and output data and compared these with
the corresponding membership data from the tier-3 industry sector
advisory committees and agricultural technical advisory
committees.[Footnote 33] We found the following:
* The services sector accounts for the largest share of U.S. output
(more than 50 percent) and a sizable share of U.S. exports (almost 30
percent); these shares both increased sharply since 1974. Yet the
committee system‘s structure has only two services sector committees
(the same number it had 20 years ago), and its composition includes
fewer than 50 members from services.
* The number of committees in the system‘s structure is heavily
weighted toward manufacturing, which has 15 of the 33 committees. This
appears to be consistent with manufacturing‘s large share of U.S. goods
exports. However, within manufacturing, some sectors such as textiles
and apparel, nonferrous ores, and lumber and wood appear to be
overrepresented in the committee system‘s membership compared with
their shares of U.S. trade, while large, exporting sectors such as
electronics (18.3 percent of U.S. exports) are underrepresented
(see fig. 6).
* Committee member composition is heavily focused on agriculture, even
though agriculture accounts for less than 1.5 percent of U.S. output
and 2.7 percent of exports. In 2001, USDA boosted the number of
agricultural technical advisory committee members from 111 to 180. As a
result, 222 of the 745 members in the entire system during fiscal year
2001 represented agricultural interests.
Figure 6: Manufacturing Committees with Membership Shares above or
below Shares of Exports and Imports, 2000:
[See PDF for image]
Source: GAO analysis of Commerce and GSA data.
[End of figure]
This is not to suggest that there should be an automatic and linear
relationship between trade levels and committee membership. In a few
cases, other factors, such as policy considerations, might justify the
imbalances between economic importance and committee representation.
For example, sizable agriculture committees may be appropriate, since
exports represent 40 percent of agricultural output and trade barriers
are high. In services, the main services committee has been meeting
monthly to keep up with comprehensive negotiations to improve the WTO
General Agreement on Trade in Services. The government services
negotiators we spoke with believed that the committee represents the
sector well, and 70 percent of services committee respondents to our
survey reported satisfaction with their sector‘s representation in the
system. Certain manufacturing sectors such as textiles are recognized
as import sensitive. Nevertheless, such reasons may not apply to the
remaining committees. Indeed, according to Commerce and USDA officials,
in most cases, current committee membership levels are functions of
private sector interest in participating, rather than a deliberate
effort by the agencies to determine appropriate levels of
representation.[Footnote 34]
Gaps in Industry Representation on Committees:
Membership in the system is also not fully aligned with the economy
because of gaps in industry representation that occur for at least two
reasons. First, there are gaps based on whether companies choose to
join the system or not, resulting in a lack of balance needed by
negotiators to cover all the industry-specific issues they must address
in trade negotiations. For example, according to one USTR negotiator, a
major telecommunications services provider opted not to participate
because it had access to USTR through other venues. The electronics
committee does not yet have a representative from the software
industry, and the intellectual property rights committee does not have
a representative from the generic drug or noncontent producing
copyright industry.[Footnote 35] Second, major foreign companies, such
as DaimlerChrysler, cannot participate because foreign-owned companies
are generally prohibited from membership on committees under USTR and
Commerce procedures and rules.[Footnote 36] In commenting on a draft of
this report, Commerce stated that the rationale for this long-standing
policy is the sensitivity of the subject matter considered by the
committees
and possible conflicts that might be experienced by U.S. firms that
have
foreign owners. U.S. subsidiaries of foreign-owned firms accounted for
more than 5 percent of U.S. employment and more than 20 percent of U.S.
goods exports in 1999; such foreign ownership has grown with
globalization and is particularly high in certain manufacturing
sectors, such as transportation equipment and chemicals. These gaps in
industry representation have encouraged negotiators to seek advice
outside the advisory committee system, including from foreign-owned
firms or trade associations that include such firms.
Need for More Outreach to Fill Gaps on Committees:
Committee membership is significantly below the levels authorized in
committee charters, averaging 49 percent of authorized capacity (see
fig. 7) in 2001 and 48 percent of authorized capacity as of August
2002. The low membership rates can at times severely limit the
availability of advice for negotiators from certain committees,
particularly since just over half of the members attend meetings, on
average, according to the attendance records made available to us. One
negotiator with overall responsibility for a major bilateral FTA said
he had hoped to rely on the committee system exclusively for advice,
but had concerns that certain committees were not sufficiently filled
to provide a meaningful cross-section of industry views. In addition,
some meeting records we reviewed indicated that more government
officials were in attendance than committee members. On the other hand,
the fact that some committees are far below authorized membership
levels means agencies have opportunities to fill gaps in industry
representation.
Figure 7: Committee Membership Levels as a Percentage of Authorized
Membership Levels, Fiscal Year 2001:
[See PDF for image]
Source: GAO analysis of committee charters and membership rosters.
[End of figure]
Officials at USTR, Commerce, and USDA acknowledge the need for
increased outreach to fill gaps in membership and have recently taken
steps toward this end. In the past, agencies primarily relied on
recruitment through Federal Register notices to attract new members,
rather than targeting specific needs or groups. Furthermore,
negotiators were not always actively involved in identifying candidates
to fill gaps in composition or representation. However, Commerce has
stepped up its outreach by encouraging current members to recruit
applicants, directly soliciting applicants at trade shows, holding
meetings outside of Washington, and speaking before trade associations
and outside groups. In addition, USDA solicited applications through
different means, including widely disseminating notices to state
departments of agriculture and other farm groups. Some USTR negotiators
reported urging industry contacts and experts to become involved, but
USTR reports that a key obstacle to filling vacancies is the difficulty
in identifying qualified individuals in the private sector who are
willing to join the advisory committees, due to the significant amount
of time and resources required to serve.
Committee System Generally Does Not Reflect Changes in Trade Policy
Issues and Stakeholders:
With little restructuring to mirror emerging trade policy issues and
new stakeholders, the committee system is unable to provide some
negotiators with all of the advice necessary to support trade policy
development. New trade issues and stakeholders have emerged since 1974,
as trade negotiations expanded beyond tariffs to include nontariff
barriers to trade and other complex trade-related issues, such as
intellectual property rights and health and safety. Moreover, the WTO
negotiations launched in November 2001 cover topics such as the
relationship between WTO rules and multilateral environmental
agreements, and negotiations on a free trade agreement with Chile cover
investment and competition (antitrust) policy. These issues require
functional expertise and expand the number of U.S. interests concerned
with and affected by trade agreements. Trade negotiators with whom we
spoke stated that there are gaps in the committee system structure
regarding functional issues such as investment and government
procurement and in representation of stakeholders in such areas as
public health.
There have been few changes in the committee system‘s structure to
address these new issues and avoid gaps in coverage. Section 135 of the
Trade Act gives USTR flexibility to restructure the committee system to
reflect changes in U.S. international trade interests. However, in the
past decade, only 3 committees--the Trade and Environmental Policy
Advisory Committee, the Trade Advisory Committee for Africa, and the
Industry Functional Advisory Committee on Electronic Commerce--have
been added to the 34-committee structure.[Footnote 37] Most of the
remaining
committees have existed for more than 20 years (see fig. 8).[Footnote
38] USTR officials acknowledge the need to update the committee system
to reflect the current economy and new trade issues, but add that the
agency would need external guidance to support any sensitive decisions
affecting existing committees.
Figure 8: Timeline for Authorization of Existing Trade Advisory
Committees:
[See PDF for image]
Source: GAO summary of GSA committee data.
[End of figure]
Note: The Trade Advisory Committee for Africa, first chartered in 1995
and still technically in existence, is not pictured in figure 8 because
it has never been constituted or met.
According to a former USTR official, a USTR effort to review the
committee system in 2000 did not even address the question of how well
the system was meeting USTR needs, because the agency did not have the
time to ask negotiators what they wanted from industry advisers. In
some cases, agencies forego addressing some recognized needs for advice
on new issues because of the time and effort required to create and
amend committees. For example, two USTR and Commerce negotiators, who
are in charge of their offices and oversee other negotiators, told us
that current ad hoc methods for obtaining advice on investment policy
are inadequate and that they believe a separate committee on investment
would be desirable. However, they expressed reservations about
undertaking the considerable effort involved to form one. (Commerce
spent more than a year establishing the E-commerce advisory
committee.):
Difficulties Incorporating Nonbusiness Stakeholders as Committee
Members:
Although many new trade issues impinge upon domestic regulatory areas
that are of concern to nonbusiness groups, USTR and the other managing
agencies have had difficulty incorporating nonbusiness stakeholders
into the committees. Some nonbusiness interests from the labor,
environment, and consumer communities participate in the committee
system but stated that they feel marginalized within it. Most
nonbusiness members currently participating in the system are placed on
a few committees in the second tier, where committees are less active
and productive than in the third tier, as shown in figures 9 and 10.
New stakeholders in the trade process, such as public health,
development, and gender advocates, have limited or no participation in
the formal committee system, even though topics such as intellectual
property are of interest to them. Some negotiators on this topic and on
services believe that nonbusiness stakeholders‘ perspective is useful
and necessary in formulating U.S. trade policy. However, the extent of
participation by nonbusiness members on tier-3 committees is still an
unresolved legal issue.
Figure 9: Average Number of Meetings Per Committee by Tier, Per Year,
Fiscal Years 1999-2001:
[See PDF for image]
Source: GAO analysis of advisory committee meeting records and annual
reports.
[End of figure]
Figure 10: Absolute Number of Meetings by Tier, Fiscal Years 1999-2001:
[See PDF for image]
Source: GAO analysis of meeting data.
[End of figure]
Nonbusiness participants with whom we spoke also feel marginalized
because they have difficulty ensuring their views get serious
consideration. For example, the ACTPN is meant to provide overall
policy advice and is required to be broadly representative of key
sectors and groups affected by trade. Six of the 33 current members
represent nonbusiness interests. In 2000, the three labor
representatives temporarily resigned from this presidential committee
because the chair said the committee would only meet once and its sole
focus would be the granting of Permanent Normal Trade Relations to
China. The labor representatives felt that their issues were not being
addressed and in their resignation letter said that the advisory
process ’relegates minority views to a marginalized dissent.“:
Key Representation Issues Have Not Been Resolved, Despite Legal
Challenges:
Most of the 22 committees administered by Commerce do not routinely
allow representation from nonbusiness interests. As a result of legal
challenges to the business-only composition of several of the Commerce
committees,[Footnote 39] two of these committees (lumber and paper
products) now have environmental representatives and are reported to be
functioning productively. A third committee, chemicals, represents the
second-leading manufacturing export sector but still lacks a permanent
environmental representative as called for by a settlement order,
resulting in the committee‘s operations being interrupted for the
second time in 2 years.
Outside of these three committees, the extent to which nonbusiness
interests, including environmental interests, can be represented on
tier-2 and tier-3 committees has not been completely resolved. Neither
Section 135 of the Trade Act nor its legislative history is clear about
how that statute relates to the Federal Advisory Committee Act‘s ’fair
balance“ requirement[Footnote 40] or about how to apply ’fair balance“
in the context of a trade advisory committee system largely composed of
discrete interests (see app. II). Recently, the Commerce Department
published a notice indicating that except for environmental
representation in the three committees where representation has been
successfully challenged, ’non-government organizations and academic
institutions do not qualify for representation on a
committee.“[Footnote 41] Nevertheless, without further clarification
by U.S. appellate courts or amendments to the current legislation about
what fair balance means for trade advisory committees, some ambiguity
about this issue will remain. Negotiators, agency officials, and
committee members have suggested the need for Congress to clarify its
intent for representation in the committee system.
The current legal uncertainty also raises several practical issues.
First, the lack of clarity in what fair balance means for these
committees makes the system more vulnerable to court challenges.
Second, our interviews with agency officials suggest that these
uncertainties may make it difficult for agencies to consider revisions
in the committee structure to better address functional issues such as
investment and public health, which are of interest to business and
nonbusiness groups.
Other Issues Related to Nonbusiness Stakeholders:
The appointment of environmental representatives to tier-3 committees
has generated concerns among some current committee members. For
example, the committee of ISAC/IFAC chairmen wrote to USTR expressing
concern that having nontraditional members on their industry sector and
functional committees would make the committees less productive in
performing their primary mission of ensuring that U.S. negotiators were
aware of industry interests and positions. One committee chair said
that business members would be less forthcoming about discussing trade
issues because of concern that nonbusiness representatives might
release sensitive information to the public, thus undermining candor
and confidence. More than 60 percent of respondents to our survey
opposed adding more nonbusiness interests to their committees (see app.
IV, question 18). These concerns were echoed many times in our
interviews with members who feared they would lose their voice in trade
policy or said that they would be unwilling to participate if the
committees become unproductive ’debating clubs.“ As an alternative, the
ISAC/IFAC chairmen recommended ’the establishment of a functional
committee or committees to serve as parallel and equal fora for
involvement by non-traditional groups.“:
Our interviews and review of agency documents found that USTR has been
making efforts to provide information to, and obtain input from,
various nongovernmental organizations outside the formal advisory
committee process. We contacted several such organizations that had
demonstrated an interest in U.S. trade policy by submitting formal
comments in response to USTR Federal Register notices or attending USTR
public briefings. While these groups welcomed increased outreach by
USTR, most felt that having a role in the formal advisory committee
system was still desirable, saying it would enhance accountability and
add balance to U.S. trade policy. However, several feared that creating
NGO-only committees would ’ghettoize“ them within the system and fail
to ensure equal access to information and decision makers. These NGOs
favor a broader overhaul of the system but acknowledge that NGOs often
do not have the requisite resources or desire to participate.
System Lacks Sufficient Leadership, Administrative Support to Reliably
Meet Mandated Responsibilities:
Despite relatively high rates of member satisfaction with the support
by USTR and other agencies such as Commerce and USDA, we found in our
review that lack of policy direction and weak system administration at
executive branch agencies are limiting the advisory committee system‘s
capacity to accomplish its statutory mission and contribute to U.S.
trade policy. USTR, as the lead agency, has not provided clear policy
direction. Execution of administrative tasks needed to keep advisory
committees operating and relevant has been slow. The limited resources
USTR and the other key agencies devote to managing the advisory
committee system have not been sufficient to position them to maximize
input from the committees.
Clear Policy Direction and Commitment to Advisory Committee System
Lacking:
Several experts and committee members stressed the importance of
organizational leadership from the top in creating an environment for
vital and effective advisory committee input into U.S. trade policy.
However, USTR has taken a decentralized and delegated approach to
obtaining private sector advice and has not demonstrated a commitment
to assume a leadership role in the advisory committee system. Through
interviews with USTR negotiators and other officials, we learned that
the agency‘s overall policy of consulting with the private sector
generally has not ensured that the formal statutory advisory committees
are systematically consulted. Agency officials explained that
negotiators are encouraged to consult with the private sector but that
they exercise individual discretion over whether to consult with the
advisory committees. As noted earlier, some negotiators whom we
interviewed reported using the committee system to obtain advice, while
others consult the committees only on a pro forma basis or do not
consult them at all. This unevenness has economic consequences: In one
example, USTR did not inform a committee that a general effort to
reduce discriminatory tariffs against U.S. goods in central and eastern
Europe was under way, and as a result, its industry sector was not
included in the final package of agreed tariff cuts.
Our examination of USTR and Commerce procedures found that they do not
provide broad guidance to USTR officials and other negotiators on their
obligation to consult with advisory committees or on when, how, and
with whom to consult. Instead, they are largely aimed at committee
members and agency administrators and focus on committee operations. A
USTR negotiator and committee members have suggested that clearer
expectations for the consultation process need to be developed for both
negotiators and advisers. Without them, misunderstandings do occur. For
example, one committee chairman, who is generally satisfied with USTR‘s
use of advisory committees, was outraged when USTR neglected to consult
his committee on an issue of long-standing interest and, instead, sent
a position paper in a broadcast E-mail to all advisers in the system
with a 2-day deadline and then presented the proposal to other nations.
Although, at the time, a USTR administering official said the broadcast
E-mail was typical, the negotiator responsible later acknowledged that
USTR mishandled the process for seek advice in this instance.
Slow Administrative and Security Procedures Disrupt Committee
Operations:
Slow and cumbersome administrative and security processes have also
hindered committee operations. Under FACA, Section 135 of the Trade Act
and implementing guidance and procedures, USTR and other federal
agencies are responsible for placing new members on committees,
rechartering committees, and creating new committees. These are
important functions that keep the advisory committee system operating
and relevant. However, our work at three key administering agencies--
USTR, Commerce, and USDA--suggests that present methods for
accomplishing these responsibilities do not ensure that the system
functions reliably.
Turnover of membership occurs regularly given the pace of global
business, industry consolidation, and distress in certain segments of
the U.S. economy. Yet, applications for prospective members spend
months in the approval pipeline before the members can participate (see
app. III). For example, USTR submitted a list of candidates for
appointment to the White House for a presidential appointment to the
Advisory Committee for Trade Policy and Negotiations in mid-February
2002, which, as of early September 2002 had not yet been cleared by the
White House.[Footnote 42] Agency officials acknowledged that these
delays are frustrating for potential members and can be a disincentive
to joining the system. Indeed, 40 percent of our survey respondents
were dissatisfied with the time it takes to appoint new members to
committees and 35 percent said the time to appoint new members has
deteriorated (see app. IV, questions 17 and 22).
Our analysis of agency documents indicates that the full appointment
process, which includes the time for members to complete the
application materials and the time for a required security clearance,
regularly takes 6 months or longer. Some time-consuming elements of the
clearance process are beyond the trade agencies‘ control.[Footnote 43]
However, all three agencies now pay for the expedited security
investigation offered by the Office of Personnel Management. Some
agencies have taken other streamlining steps, such as providing interim
security clearances.[Footnote 44] According to DFOs and other agency
officials, applying these reforms more widely could alleviate this
major irritant.
FACA‘s requirement that committees continued beyond 2 years must be
rechartered has been disruptive for the trade advisory committee
system, posing a particular burden for new administrations until their
key policymaking vacancies are filled. In several cases during our
audit period, committees ceased to meet and thus could not provide
advice, because the agencies had not adopted new charters and appointed
members. For example, the agriculture advisory committees did not meet
between April and October 2001 while USDA went through the process of
appointing members for its six committees.[Footnote 45] The committee
charters and rosters expired before the United States was able to vet
its market access proposal for the Chile FTA negotiations, and as a
result, a lead USDA negotiator reported that he was not able to use the
committees to obtain input on the proposal. The Labor Advisory
Committee‘s charter expired in July 2001 and was not renewed until
February 2002. As a result, the LAC Steering Committee could no longer
meet or provide formal committee advice as efforts to launch new WTO
negotiations at the Doha Ministerial in Qatar were under way. (Only one
of the LAC respondents to our survey reported that the system was
fulfilling its statutory role in U.S. trade policy.) Commerce
successfully avoided disruptions in its most recent rechartering by
starting the process for the 22 committees it manages well before their
charters expired. However, the effort to appoint new members and obtain
security clearances required the full-time attention of two of the
three Commerce employees responsible for managing the committees and
took 7 months to complete. Commerce, USDA, and USTR officials said the
tasks associated with the rechartering process--such as preparing new
charters, analyzing the attendance records of members up for
reappointment, and reviewing member application information--places a
significant burden on their ability to manage the committee system and
detracts from their ability to support committee operations.
Resources Devoted to Committee Management Out of Step with Required
Tasks:
The resources USTR and the other agencies devote to managing the
advisory committee system do not match the tasks that must be
accomplished to keep the system running reliably and well. (We recently
testified on human capital shortages at trade agencies, including USTR
and Commerce.[Footnote 46]) According to annual reports that the
agencies prepare for the General Services Administration, federal staff
time allocated to managing all the committees totaled 15.60 full-time
equivalent (FTE) positions[Footnote 47] in fiscal year 2001 and
averaged 0.47 FTEs per committee.[Footnote 48] USTR officials said the
current staffing levels in the office responsible--three positions with
multiple responsibilities besides the committee system--do not allow
them time to proactively manage committee operations. The recent head
of the office said that simply restarting all the lapsed committees and
keeping the rest of the system operating were occupying much of the
time she could devote to the system.
Commerce and USDA manage more committees and face similar challenges.
Commerce officials responsible for managing the Commerce committees
reported that they must focus their limited staff on the rechartering
and appointment processes, which has not allowed them to meet their
responsibilities to attend all the committee meetings. However, some
improvement may be forthcoming: In its official comments on our draft
report, Commerce stated that it will shortly hire two new full-time
staff to support administration of the committee system. Meanwhile, a
USDA official in the office responsible for managing Agriculture‘s
committees--which has one professional position devoted to advisory
committee work and two other positions with multiple responsibilities
in addition to managing the committees--said the reappointment process
in 2001 took more than 85 percent of her time and prevented her from
fulfilling other key job responsibilities, such as legislative liaison.
Resource limitations also affect the use of technology. Although
committee members supported the use of technology to improve committee
operations (79 percent strongly or generally supported increased
technology to inform members and 60 percent supported the use of
videoconferencing technology to enable greater participation in
meetings), the cost of new technology is a significant determining
factor in its adoption and use. Commerce is examining options to expand
the use of its Web site for committee members, but the cost of options
at the high end of estimates ($200,000)--which include the security
safeguards needed for improved member access to sensitive documents--
far exceeds available funding. Finally, a USTR official reported that
the agency‘s live Web casts from the WTO Doha Ministerial were very
costly (estimated at $50,000) and cannot be done on a routine basis.
However, USTR plans to examine less expensive technological options,
such as taped presentations through its Web site.
Conclusions:
Despite several weaknesses we identified, negotiators, agency
officials, and members told us that the advisory committee system
Congress created 28 years ago still provides value to U.S. trade
policy. Many negotiators report that input from the system has helped
the United States achieve more beneficial trade agreements. Members
devote time and contribute much to the process and report generally
high satisfaction with many aspects of committee operations and
effectiveness. Nevertheless, our work suggests that the committee
system is not being used to full advantage and has lost some of its
vitality in providing useful advice on trade policy matters.
Consultations are not always timely or meaningful, and when advice is
provided, there is little assurance that executive branch officials are
held accountable for considering it. Furthermore, the committee
structure has not evolved fully to reflect today‘s economy. Some key
trade interests that have recently surfaced--industries, issues, and
stakeholders--are missing or poorly represented in the system.
Conflicts over interpreting how FACA‘s fair balance requirement applies
to the advisory committees have complicated the task of incorporating
nonbusiness stakeholders. Low membership rosters for most existing
committees further reduce the opportunity for negotiators to obtain a
full range of private sector views. Finally, USTR‘s decentralized
management of the committees has left the system without sufficient
direction or support. With limited resources devoted to the system‘s
functioning, agencies are struggling with administrative tasks such as
security clearances associated with appointments and 2-year
rechartering requirements. To perform the unique role in U.S. trade
policy Congress has given it, the advisory committee system‘s capacity
to provide frank and representative advice needs strengthening.
Because important multilateral, regional, and bilateral negotiations
are currently under way for which ongoing advisory committee input is
expected and desirable, improvements should be made to the existing
system, particularly with regard to the timeliness and quality of
consultations, gaps in representation, and committee administration.
However, given the issues we identify, improving the system‘s readiness
to play its envisaged role in U.S. trade policy will also require more
fundamental reform.
Recommendations for Executive Action:
As Congress seeks to provide new direction to the President on U.S.
trade policy, we recommend that the U.S. Trade Representative, as the
lead agency for the committee system, work with the Secretaries of
Agriculture, Commerce, and Labor and the EPA Administrator to make the
existing system‘s consultation process more meaningful and reliable.
1. Specifically, we recommend that the agencies
adopt or amend guidelines and procedures to ensure that:
* advisory committee input is sought on a continual and timely basis,
* consultations are meaningful,
* committee advice is considered and committees receive substantive
feedback on how agencies respond to their advice;
2. continue to increase outreach efforts to fill gaps in committee
composition and revitalize membership;
3. streamline the nomination and appointment process for committee
members and prevent disruptions in committee activity due to lapses in
charters; and:
4. provide sufficient technological and human resources to support
meaningful consultations and ensure effective functioning of the
system.
In addition, we recommend that the U.S. Trade Representative work with
the Secretaries of Agriculture, Commerce, and Labor and the EPA
Administrator to conduct an assessment of the entire system and update
it to make it more relevant to the current U.S. economy and trade
policy needs.
In conducting this assessment and updating the system, USTR, in
conjunction with the other agencies, should seek to:
1. more closely align the system‘s structure and composition with the
current economy,
2. better incorporate new trade issues and interests,
3. more reliably meet negotiator needs, and:
4. better match agency resources to the tasks associated with managing
the system.
Matters for Congressional Consideration:
To assist the U.S. Trade Representative and the other agencies in
updating the system and improving advisory committee operations,
Congress may wish to consider:
1. clarifying its intent regarding how to apply the FACA fair balance
requirement to the trade policy advisory committee system, and:
2. providing an exception to FACA administrative requirements by
extending the charter period for the trade policy advisory committees
beyond 2 years.
Agency Comments and Our Evaluation:
We provided draft copies of this report to the following agencies for
review: the Office of the U.S. Trade Representative, the Department of
Agriculture, the Department of Commerce, the Department of Defense, the
Department of Labor, and the Environmental Protection Agency. We
received formal comments from USTR, Agriculture, and Commerce (see
apps. VI through VIII). The three agencies, as well as Labor and EPA,
also provided technical comments, which we incorporated in the report
as appropriate. The Department of Defense reviewed the report but did
not provide formal comments.
USTR and USDA agreed with our overall findings and reported on initial
steps they are taking to implement our recommendations. Commerce
characterized the report as thorough and fair, but urged us to make a
number of modifications. In general, Commerce believes that we
underplay member satisfaction with the system. Commerce also took issue
with our conclusions on apparent mismatches between the committee
structure and the current U.S. economy and agencies‘ administrative
capacity. Some of Commerce‘s comments contain new information or useful
clarifications that we have added to the reportęfor example, language
about the agency‘s concerns over security breaches and additional
details about outreach efforts. However, as explained in appendix VIII,
we do not agree with Commerce‘s changes related to members‘ concerns
about the timeliness and quality of consultations, accountability for
seeking and responding to committee advice, and the need to update the
system‘s structure. We believe that the recent passage of Trade
Promotion Authority and the ambitious negotiating plans that have since
been announced only heighten the urgency of taking steps to ensure that
U.S. negotiators have timely, meaningful, and representative input from
the private sector on U.S. trade policy.
As agreed with your office, we plan no further distribution of this
report until 30 days from its issue date. At that time, we will send
copies to appropriate congressional committees and to the U.S. Trade
Representative, the Secretary of Agriculture, the Secretary of
Commerce, the Secretary of Defense, the Secretary of Labor, and the
Administrator of the Environmental Protection Agency. Copies will also
be made available to others upon request. In addition, this report is
also available on GAO‘s Web site for no charge at http://www.gao.gov.
If you or your staff has any questions about this report, please
contact me on (202) 512-4128. Other GAO contacts and staff
acknowledgments are listed in appendix IX.
Sincerely yours,
Loren Yager
Director, International Affairs and Trade:
Signed by Loren Yager:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
This appendix discusses the scope and methodology for our work. We have
included a separate segment at the end of appendix IV providing
technical information on our methodology for the survey of committee
members.
Scope:
The scope of our review included analysis of 34 private sector advisory
committees on all aspects of committee activities, as well as the 4
agencies that currently administer them: the Departments of Commerce,
Labor, and Agriculture and the Office of the United States Trade
Representative (USTR). The time period covered by our review was
generally fiscal years 1999 to 2001.
At the time we initiated our review, three policy advisory committees
in the second tier were in uncertain stages of activity. The charters
for the Labor Advisory Committee and the Defense Policy Advisory
Committee on Trade had expired in 2001, but Labor and Defense officials
indicated that their agencies were rechartering the committees. A third
policy advisory committee dealing with trade with Africa has a charter
and seven members, but the committee had not met during our review
period.
Our survey of members, which focused on committee operations, was under
way when these uncertainties existed. Defense and Labor committee
members were included in our survey, but the Africa committee‘s members
were not. Ultimately, the Department of Labor rechartered its committee
in February 2002. However, in January 2002, Defense officials informed
us that the Department of Defense did not intend to reconstitute its
committee, which had 10 members on its latest roster, as part of a
departmental effort to reduce the number of advisory committees.
Regarding the Africa committee, USTR informed us in March 2002 that it
had rechartered the committee and was seeking to appoint more members
to it. As a result, the Labor and Africa committees are included in our
discussion of the committee‘s current structure and count of committees
and members, but the Defense committee is not.
Methodology:
For our first and second objectives--determining the advisory system‘s
value to U.S. trade policy and which aspects of the consultation
process participants indicate are and are not satisfied--we used three
methods of inquiry: interviews, a survey, and document analysis.
Regarding interviews, in initial meetings with agency officials and
other trade experts involved in the committee process, we were told
that the best way to obtain information on how well the trade advisory
committee system functions is to interview the key participants. These
officials and experts stated that the available documentation on
committee activities would not provide as comprehensive a picture as
interviews. We therefore first conducted 168 interviews with every type
of participant in the process, including 25 executive branch
negotiators, 40 other agency officials, 30 committee chairmen, 50
committee members, and 15 trade experts. To gain the perspectives of
organizations that do not currently participate in the advisory
committee system, we interviewed selected representatives of
nonbusiness non-governmental organizations (NGOs) having a
demonstrated interest in trade policy. Interest was evidenced by
submitting formal comments in response to USTR Federal Register notices
or attendance at USTR public briefings.
In addition to interviews, we conducted a Web-based survey of 720
committee members and staff liaisons[Footnote 49] between January and
March 2002 to obtain views on matters such as overall satisfaction with
committee operations and effectiveness. We surveyed all the members and
staff liaisons whose names appeared on lists obtained from the
Departments of Agriculture, Commerce, Defense, Labor, and USTR. We
developed our questionnaire in November and December, 2001. We put the
instrument on a special Web site on the GAO server, activated it on
January 17, 2002, and kept it open until March 15, 2002. In all, we
received a total of 515 usable responses to our survey, for an overall
adjusted response rate of 72 percent. The response rate varied
considerably by committee and by tier. For example, seventy-eight (78)
percent of tier-3 members responded to the questionnaire, compared with
55 percent of tier-2 members and 57 percent of tier-1 members.
Consequently, while we present the aggregated responses for all
committee members who responded, we are not generalizing to the
universe of all committee members. The survey also allowed for some
open-ended responses. Members provided considerable commentary, which
is reflected in the body of the report but is not summarized
statistically. The survey results and a technical description of the
survey methodology are in appendix V.
Third, we collected and analyzed documents from four agencies that
currently administer committees. Documentation generally covered
fiscal years 1999 through 2001. Specifically, we collected and reviewed
applicable laws, legislative history, and implementing rules; committee
charters and rosters; agency operating procedures and other guidance;
meeting notices, agendas, summaries, minutes, and transcripts;
interagency decision memos; formal committee reports; and agency
correspondence with advisory committees. We also reviewed written
responses to an April 2000 Federal Register notice requesting
suggestions to improve the advisory committee system.
To investigate whether the system matches the current U.S. economy and
supports U.S. trade policy needs, we obtained and analyzed U.S. trade
data and committee membership rosters, as well as information obtained
during our interviews and Web-based survey. Specifically, we examined
data on annual industry sector contributions to U.S. gross domestic
product from 1974 to June 2000 and determined commodity shares of U.S.
imports and exports using data collected by Commerce, the U.S.
International Trade Commission, and the Department of Treasury. We
defined commodity groups using Commerce‘s 4-digit Standard Industrial
Classification level codes,[Footnote 50] and we used Commerce‘s
determination of how best to match each advisory committee to a
commodity group.[Footnote 51] We determined which industries are over-
and under-represented in the committee system with respect to their
U.S. import and export contributions by comparing this data with lists
showing annual numbers of members on each committee in fiscal years
1999 through 2001. We also discussed the adequacy of coverage of
industry sectors with agency and industry officials. We identified
trade issues and associated stakeholders that have emerged since 1974
by reviewing academic and agency literature. We discussed the system‘s
coverage of these issues and stakeholders in interviews with agency
officials and selected business and nonbusiness organizations.
To examine how well USTR and the other agencies are managing the
advisory committee system, we collected and examined available data
from USTR, USDA, and Commerce about the time involved in the
appointment process for new members. We also interviewed agency
officials, negotiators, and committee members about agency practices
and other factors that affect the extent of consultation with the
advisory committees and the capability of the managing agencies to
maintain full and active committees. Finally, for information about
agency resources devoted to the committee system we obtained and
reviewed the annual reports for each advisory committee for 1999 to
2001 from the General Services Administration (GSA) and conducted
interviews with agency officials.
We conducted our work from August 2001 through May 2002 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Applying Fair Balance Requirement to Trade Advisory
Committees:
The Federal Advisory Committee Act (FACA) includes a fair balance
requirement that applies to each advisory committee covered by the act.
In this regard, the legislative history of FACA shows that the focus of
committee membership should be on the groups directly affected by the
work of a committee, rather than whether these groups represent
business or nonbusiness interests. The broad language of section 135 of
the Trade Act of 1974 making FACA generally applicable to the trade
advisory committees indicates that the fair balance requirement applies
to them. Nevertheless, there is still some legal ambiguity about what
this means within the context of the trade advisory committee
structure. Aside from lack of clarity in the legislation, at this
point, there appear to be too few decided court cases to show any trend
in fair balance challenges by nonbusiness groups to the composition of
trade advisory committees.
FACA Requires Fair Balance on Federal Advisory Committees:
FACA, passed in 1972, sets forth certain requirements for Congress to
follow in creating federal advisory committees.[Footnote 52] One such
requirement states that any legislation establishing an advisory
committee shall require that the membership of the committee be fairly
balanced in terms of points of view represented and the functions the
committee performs.[Footnote 53] GSA guidelines implementing
FACA[Footnote 54] indicate that to attain a fair balance of membership
on an advisory committee, agencies should ensure that they consider a
cross-section of those directly affected, interested, and qualified, as
appropriate to the nature and functions of the committee.[Footnote 55]
The legislative history of FACA shows that the fair balance requirement
was intended to ensure that persons or groups directly affected by the
work of a particular advisory committee would have some representation
on the committee.[Footnote 56] In this regard, the House Report on FACA
criticized the composition of an advisory council for only having
industry representatives. The report suggested that representatives of
conservation, environment, clean water, consumer or other public
interest groups should have been present at meetings with government
officials to consider a proposed questionnaire regarding national
industrial wastes inventory.[Footnote 57]
FACA‘s Fair Balance Requirement Applies to Trade Advisory Committees:
The Trade Act of 1974,[Footnote 58] which mandated creation of advisory
committees on trade policy, was enacted 2 years after FACA was passed.
Section 135(f) of the Trade Act states that the provisions of FACA do
apply to the trade advisory committees, with limited exceptions
relating to open meetings and public availability of
documents.[Footnote 59] As the fair balance requirement is not one of
the excepted FACA provisions, the requirement and the implementing GSA
guidance would apply to the trade advisory committees established under
section 135 of the Trade Act. This was one of the findings made by one
of the two United States courts that have considered application of the
FACA fair balance requirement to section 135.[Footnote 60]
Trade Act Not Clear on What Fair Balance Means within Trade Advisory
Committee Structure:
Although the language of FACA indicates that the fair balance
requirement applies to each advisory committee, there is some ambiguity
about what this means within the context of the trade advisory
committee structure. Section 135 of the Trade Act called for formation
of three different kinds of trade advisory committees for the purpose
of creating an institutional framework to ensure that representative
elements from the private sector have the opportunity to present their
views to U.S. negotiators.[Footnote 61] The three- tier structure
established by section 135, as amended,[Footnote 62](1) requires
establishment
of an Advisory Committee for Trade Policy and Negotiations (ACTPN)
whose
function is to provide overall trade policy advice (tier 1); (2)
authorizes
establishment of general policy advisory committees whose function is
to
provide general policy advice (tier 2); and (3) requires establishment
of
industry sector and functional advisory committees, as may be
appropriate,
whose functions are to provide technical advice and information about
negotiations over particular products and other factors relevant to
positions
of the United States in trade negotiations (tier 3).[Footnote 63]
The language of section 135(b), as amended, does show that ACTPN, the
tier-1 committee, is to include both business and nonbusiness
interests. Specifically, ACTPN is to be broadly representative of the
key sectors and groups of the economy affected by trade and ’shall
include representatives of non-federal governments, labor, industry,
agriculture, service industries, retailers, non-governmental
environmental and conservation organizations, and consumer
interests.“[Footnote 64] However, section 135 of the 1974 Trade Act and
its legislative history do not specifically discuss how the fair
balance requirement of FACA was intended to apply to the tier-2 and
tier-3 committees. With regard to the general policy advisory
committees of tier 2, section 135 authorizes, but does not require, the
President to establish such committees for industry, labor,
agriculture, services, investment, defense, and other interests, as
appropriate. Section 135 states that these committees, to the extent
practicable, are to be representative of all industry, labor,
agricultural, service, investment, defense, and other interests,
including small business interests. Regarding the industry sector and
functional advisory committees of tier 3, the President is directed to
establish them as appropriate, and similar to the tier-2 committees, to
the extent practicable each tier-3 committee is to be representative of
all industry, labor, agriculture, or service interests, including small
business interests in the sector or functional areas
concerned.[Footnote 65] The language of section 135 suggests that each
of the tier-2 and tier-3 committees is to be composed of members
involved in the particular sector, and does not indicate any intention
to expand these committees to include other interests.
The legislative history of the 1974 act, which shows that Congress was
concerned that in prior trade negotiations there had not been adequate
input from U.S. producers, would appear to support this view. In this
regard, the Senate report stated that the purpose of the procedures in
section 135 were to ’strengthen the hand of U.S. negotiators by
improving their knowledge and familiarity with the problems domestic
producers face in obtaining access to foreign markets.“[Footnote 66]
Similarly, the House report stated that in past trade negotiations
’there has not been adequate input from U.S. producers who are in the
best position to assess the effects of removing U.S. and foreign trade
barriers on their particular products.“ Nevertheless, the legislative
history of the 1979 amendments to section 135[Footnote 67] indicates
congressional interest in broadening representation of the tier-2 and
tier-3 committees to include other interests. In this regard, the
Senate report states that in establishing the membership of the policy,
sector, or functional advisory committees, it was expected that each of
these committees ’will fully represent the interests of the Government,
small business, retailers, wholesalers, distributors, consumers and the
general public, as well as labor, industry, agriculture and services,
as the case may be.“[Footnote 68] The House report has similar language
and also stated that ’[a]ll major recognized organizations, regardless
of their point of view, should be invited to participate in appropriate
advisory groups.“[Footnote 69] These statements are consistent with the
legislative history of FACA, which shows that the focus of committee
membership was intended to be on the groups directly affected by the
work of a committee, rather than whether those groups represent
business or nonbusiness interests.
Court Decisions Provide Little Guidance in Applying Fair Balance:
An additional problem in applying the FACA fair balance requirement to
the trade advisory committees concerns the relatively small number of
court decisions that have considered the issue. Although several U.S.
Courts of Appeal had rejected challenges under FACA to the composition
of other federal advisory committees,[Footnote 70] until 1999 no case
had involved a civil-society, fair-balance challenge to membership on a
trade advisory committee.[Footnote 71] Since then, two rulings have
been issued, and a settlement agreement has been reached in another
case. These dispositions have affected three tier-3 advisory
committees.
* In November 1999, several environmental organizations brought an
action in the Federal District Court for the Western District of
Washington, Northwest Ecosystem Alliance v. USTR,[Footnote 72]
challenging the composition of two tier-3 industry advisory committees
that deal with forest products. The district court found that fair
balance meant balanced representation within each trade advisory
committee, not among all advisory committees, and ruled that the two
committees should include environmental representatives.[Footnote 73]
Two of the factors the court relied on in making its ruling were that
(1) the forest product committees routinely advised the government on
trade issues that affected the environment, both nationally and
internationally, and (2) the positions supported by the committees were
directly contrary to those supported by the environmental organizations
challenging their fair balance. Importantly, the court also rejected
USTR‘s position that fair balance is fulfilled if the membership of an
industry sector advisory committee is broadly representative of the
industry sector for which the committee was established. The court
found that this position contradicted one of the primary purposes of
FACA, which was to end industry domination of advisory bodies. To
implement its holding, the court ordered USTR to make a good faith
effort to expedite the appointment of at least one properly qualified
environmental representative to each of the two committees.[Footnote
74] USTR and Commerce appealed the case to the U.S. Court of Appeals
for the Ninth Circuit, and the United States filed a brief in support
of the appeal.[Footnote 75] Nevertheless, the United States later
dropped the appeal, and environmental representatives were appointed to
the two forest product advisory committees.
* After the decision in Northwest Ecosystem Alliance, various public
interest groups filed a lawsuit in the same federal district court,
Washington Toxics Coalition v. USTR,[Footnote 76] asking the court to
require USTR and Commerce to appoint one or more environmental
representatives to the chemical and allied products industry sector
advisory committee. In March 2001, the parties entered into a
settlement agreement in which USTR and Commerce agreed to make a good
faith effort to expedite the appointment of one or more qualified
environmental representatives to this committee. In response to the
Washington Toxics Coalition case, in early 2001, several members of the
chemical and allied products advisory committee brought an action
before the U.S. District Court for the District of Columbia, Gamble v.
Zoellick,[Footnote 77]asking the court to preclude environmental
representatives from becoming members of their committee. The court
rejected this position and held that the committee members lacked
standing to challenge the appointment of an environmental
representative to their committee.[Footnote 78] In support of its
ruling, the court also found that there was nothing in the Trade Act of
1974 that prohibited USTR and Commerce from appointing an environmental
representative. The court noted that the appointment of other members
was not precluded by the mandatory language of section 135 requiring
that the industry sector advisory committees be representative of all
industry, labor, agricultural, or service interests in the sector
concerned. In this regard, the court endorsed the U.S. government‘s
position that the language of section 135 gave the government
considerable discretion in making appointments to the chemical and
applied products committee beyond those required.[Footnote 79]
Current Status:
To date, there have been no further court challenges by environmental
or other civil society groups to the composition of trade advisory
committees. Without further clarification by U.S. appellate courts or
the Congress about how to apply the FACA fair balance requirement to
the trade advisory committee system, some ambiguity about this issue
will remain.
Current executive branch policy is that tier-3 committees are generally
not open to nonbusiness groups. A March 20, 2002, Federal Register
notice issued by the U.S. Department of Commerce states that with the
exception of the 3 committees affected by fair balance challenges--ISAC
3 (chemicals), ISAC 10 (lumber and wood products) and ISAC 12 (paper
and paper products)--“non-government organizations do not qualify for
representation on a committee.“[Footnote 80] Regarding to the
Washington Toxics Coalition case, the settlement agreement provided
that until an environmental representative was appointed, USTR and
Commerce could call meetings of the chemical and applied products
advisory committee but had to make a good-faith effort to include an
interim qualified environmental representative at any such meetings. An
interim environmental representative has attended all but one of the
nine committee meetings held since the settlement, but he declined to
continue to serve beyond the renewal of the committee‘s charter in
March, 2002. The committee--which represents the second-leading
manufacturing export sector--has not met since March 13, 2002. One
potential environmental representative has applied to serve as
environmental representative on the committee, and the application is
being considered. To date no appointment has been made.
[End of section]
Appendix III: Nomination and Security Clearance Process for Trade
Advisory Committees:
Commerce, USDA, and USTR follow slightly different procedures in
screening applicants for advisory committees and in obtaining security
clearances. Generally, the vetting process for new members includes an
internal agency review and a security clearance investigation performed
by the Office of Personnel Management (OPM). This appendix provides
information on the nomination and security process, based on data
provided by the three agencies.
Agencies begin a review process after they receive a nomination or a
letter of interest from a prospective member. Figure 11 illustrates the
screening process by each agency and the approximate time for
applicants to move through different stages of the process toward
committee membership. For example, the initial review process averages
70 days at the Department of Agriculture, while the Department of
Commerce conducts an initial, 5-day review and then saves time by
continuing the review concurrently with the security clearance process.
Figure 11 does not include the time spent by committee members in
completing the application materials and assembling the documents
required for the security clearance because agency data on this part of
the process is not systematic or complete. Based on our review of
available agency data and interviews with agency officials about their
typical experience, we found that the appointment process can regularly
take 6 months or longer to complete, if additional time for completing
application materials is added.
Figure 11: Advisory Committee Appointment Process and Timetable for
USTR, USDA, and Commerce:
[See PDF for image]
[A] Tracking of the time it takes for members to return the security
clearance paperwork varies across agencies, but according to data and
interviews with agency officials, it can take as long for applicants to
complete and correct paperwork as it takes for agencies to complete the
security clearance investigation.
[B] This reflects the timeframe for the appointments made during the
2001 rechartering process.
[C] USTR stated there was no standard duration for vetting a candidate.
Source: GAO analysis of data from USTR, USDA, and Commerce.
[End of figure]
The security clearance process can take about 3 months, according to
agency officials and data. Although we found an average waiting time
for clearances at USTR of 227 days for the period fiscal years 1999 to
2001, the average wait time for a clearance fell to 84 days when USTR
began using the OPM to perform its security clearances in 2000.
Department of Agriculture officials said the process of obtaining a
clearance takes about 3 months once the completed paperwork is
submitted. Security clearance data provided by the Department of
Commerce show that the process takes an average of approximately 105
days. All members receive a secret-level national security clearance,
following a background investigation from the OPM. The clearance is
valid for 10 years.[Footnote 81]
[End of section]
Appendix IV Results of GAO‘s Survey of Trade Advisory Committee
Members:
[See PDF for image]
[End of figure]
[End of section]
Appendix V: Comparisons of Committee Structure with Trade Indicators:
To examine how well the committee structure reflects the current
economy, we identified the range of goods or services represented by
individual third tier committees and the export and import shares of
those goods and services in total U.S. exports and imports.[Footnote
82] We then compared this data to membership data for each committee
obtained from the GSA, which maintains annual reports covering each
fiscal year covered by our review. Based on these calculations, table 5
shows the export and import shares as well as the relative percentage
of membership for each committee in 2000.
Table 5: Shares of Total U.S. Exports and Imports and Percentage of
Membership by Committee, 2000:
Committee: ISAC-1: Aerospace Equipment; Share of total U.S. exports:
5.2%; Share of total U.S. imports: 1.9%; Percent of membership: 4.1%.
Committee: ISAC-2: Capital Goods; Share of total U.S. exports: 8.6;
Share of total U.S. imports: 7.1; Percent of membership: 5.1.
Committee: ISAC-3: Chemicals and Allied Products; Share of total U.S.
exports: 9.1; Share of total U.S. imports: 6.4; Percent of membership:
9.0.
Committee: ISAC-4: Consumer Goods; Share of total U.S. exports: 5.9;
Share of total U.S. imports: 7.4; Percent of membership: 6.0.
Committee: ISAC-5: Electronics and Instrumentation; Share of total U.S.
exports: 18.3; Share of total U.S. imports: 18.9; Percent of
membership: 3.7.
Committee: ISAC-6: Energy; Share of total U.S. exports: 1.3; Share of
total U.S. imports: 8.6; Percent of membership: 3.0.
Committee: ISAC-7: Ferrous Ores and Metals; Share of total U.S.
exports: 0.6; Share of total U.S. imports: 1.3; Percent of membership:
4.6.
Committee: ISAC-8: Footwear, Leather, and Leather Products; Share of
total U.S. exports: 0.2; Share of total U.S. imports: 1.6; Percent of
membership: 3.0.
Committee: ISAC-9: Building Products and Other Materials; Share of
total U.S. exports: 2.0; Share of total U.S. imports: 2.2; Percent of
membership: 2.8.
Committee: ISAC-10: Lumber and Wood Products; Share of total U.S.
exports: 0.6; Share of total U.S. imports: 1.2; Percent of membership:
4.6.
Committee: ISAC-11: Nonferrous Ores and Metals; Share of total U.S.
exports: 2.0; Share of total U.S. imports: 2.1; Percent of membership:
4.6.
Committee: ISAC-12: Paper and Paper Products; Share of total U.S.
exports: 1.6; Share of total U.S. imports: 1.5; Percent of membership:
2.1.
Committee: ISAC-13: Services; Share of total U.S. exports: 28.1; Share
of total U.S. imports: 14.3; Percent of membership: 10.1.
Committee: ISAC-14: Small and Minority Business; Share of total U.S.
exports: N/A; Share of total U.S. imports: N/A; Percent of membership:
N/A.
Committee: ISAC-15: Textiles and Apparel; Share of total U.S. exports:
2.0; Share of total U.S. imports: 5.5; Percent of membership: 6.2.
Committee: ISAC-16: Transportation, Construction, and Agricultural
Equipment; Share of total U.S. exports: 8.8; Share of total U.S.
imports: 14.2; Percent of membership: 2.1.
Committee: ISAC-17: Wholesaling and Retailing; Share of total U.S.
exports: N/A; Share of total U.S. imports: N/A; Percent of membership:
3.5.
Committee: ATAC: Animal and Animal Products; Share of total U.S.
exports: 0.4; Share of total U.S. imports: 0.8; Percent of membership:
5.3.
Committee: ATAC: Fruits and Vegetables; Share of total U.S. exports:
0.4; Share of total U.S. imports: 0.6; Percent of membership: 5.5.
Committee: ATAC: Grains, Feed, and Oilseeds; Share of total U.S.
exports: 1.6; Share of total U.S. imports: 0.1; Percent of membership:
6.2.
Committee: ATAC: Sweeteners; Share of total U.S. exports: 0.0; Share of
total U.S. imports: 0.0; Percent of membership: 3.5.
Committee: ATAC: Tobacco, Cotton, and Peanuts; Share of total U.S.
exports: 0.3; Share of total U.S. imports: 0.0; Percent of membership:
5.1.
Committee: Total Manufacturing; Share of total U.S. exports: 66.2;
Share of total U.S. imports: 79.9; Percent of membership: 60.8.
Committee: Total Services; Share of total U.S. exports: 28.1; Share of
total U.S. imports: 14.3; Percent of membership: 13.6.
Committee: Total Agriculture; Share of total U.S. exports: 2.7; Share
of total U.S. imports: 1.5; Percent of membership: 25.6.
Committee: Other (govt, etc.); Share of total U.S. exports: 3.0; Share
of total U.S. imports: 4.3; Percent of membership: 0.0.
N/A=Not applicable.
Note: ISAC 14 (Small and Minority Business) is not included in the
calculations for committee shares of membership.
Source: GAO analysis of data from the Department of Commerce, Treasury
Department, International Trade Commission, and the General Services
Administration.
[End of section]
Appendix VI: Comments from the Office of the United States Trade
Representative:
EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF THE UNITED STATES TRADE
REPRESENTATIVE WASHINGTON, D.C. 20508:
August 1, 2002:
Loren Yager, Ph.D.
Director, International Affairs and Trade U.S. General Accounting
Office Washington, D.C. 20548:
Dear Dr. Yager:
Thank you for the opportunity to submit comments on the draft General
Accounting Office (GAO) report entitled ’International Trade: Advisory
Committee System Should Be Updated to Better Serve U.S. Policy Needs.“
The Bush Administration considers the advisory committee system to be
an integral part of U.S. trade policy that provides valuable input as
we push forward with our ambitious trade agenda designed to improve
economic opportunities for America‘s farmers, workers, businesses, and
consumers.
Your comprehensive report provides an in-depth assessment of the role,
structure, and operation of the system, which Congress created in 1974
to ensure that U.S. trade policy adequately reflects our commercial and
economic interests. As your report points out, the advisory committee
system exists to facilitate consultations between our negotiators and
other interested groups in order to create trade agreements that
Congress can approve with confidence.
I am pleased that your report confirms that the committee system is of
great value to U.S. trade policy and plays a key role in helping the
United States achieve more beneficial trade agreements. As the report
states, a strong majority of committee members have ’high levels of
satisfaction“ with the system. Furthermore, the report found ’ample
evidence“ that the Office of the U.S. Trade Representative and other
executive branch agencies are ’informing advisers about developments in
U.S. trade policy and seeking their input, formally and informally, on
key initiatives.“:
Your report identifies some components of the system that could benefit
from strengthening, including the timeliness of consultations,
mechanisms for feedback to committees, alignment of committee structure
with the current U.S. economy, and resources devoted to management of
the system. The following comments address GAO‘s four recommendations
contained in the draft report:
USTR is developing internal guidelines clarifying procedures for
consulting with trade advisory committees. The agency also is working
with the Departments of Commerce, Agriculture, Labor, Environmental
Protection Agency, and Defense to coordinate communications strategies;
USTR, working with the Departments of Commerce, Agriculture, Labor,
Environmental Protection Agency, and Defense, is continuing to seek
qualified candidates to serve on committees as vacancies arise. USTR
also supports GAO‘s recommendation that Congress amend the Federal
Advisory Committees Act to extend the two-year rechartering requirement
for the trade policy advisory committees;
USTR is consulting with security agencies to identify solutions for
streamlining the security clearance process;
USTR is exploring the feasibility of technological solutions for
consulting with advisors, including webcast technology, which was used
successfully at the World Trade Organization negotiations in Doha,
Qatar, last November. USTR also hopes - pending budget approval and
certification by security officials - to build a password-protected
encryPted website for advisors so they can obtain information in a
timely and convenient manner.
USTR is committed to ensuring that the advisory committee system
continues to meet the objectives set by Congress of providing frank and
representative advice on U.S. trade policy. Your report provides a
valuable overview of the system, and offers ideas for improvements that
match our own goals for strengthening the system. We appreciate the
time and attention of your auditors, and are grateful to have had the
opportunity to give our input during the final drafting of this report.
Josette Shiner:
Associate U.S. Trade Representative:
USDA:
United States Department of Agriculture:
Signed by Josette Shiner:EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF
THE UNITED STATES TRADE
REPRESENTATIVE WASHINGTON, D.C. 20508:
August 1, 2002:
Loren Yager, Ph.D.
Director, International Affairs and Trade U.S. General Accounting
Office Washington, D.C. 20548:
Dear Dr. Yager:
Thank you for the opportunity to submit comments on the draft General
Accounting Office (GAO) report entitled ’International Trade: Advisory
Committee System Should Be Updated to Better Serve U.S. Policy Needs.“
The Bush Administration considers the advisory committee system to be
an integral part of U.S. trade policy that provides valuable input as
we push forward with our ambitious trade agenda designed to improve
economic opportunities for America‘s farmers, workers, businesses, and
consumers.
Your comprehensive report provides an in-depth assessment of the role,
structure, and operation of the system, which Congress created in 1974
to ensure that U.S. trade policy adequately reflects our commercial and
economic interests. As your report points out, the advisory committee
system exists to facilitate consultations between our negotiators and
other interested groups in order to create trade agreements that
Congress can approve with confidence.
I am pleased that your report confirms that the committee system is of
great value to U.S. trade policy and plays a key role in helping the
United States achieve more beneficial trade agreements. As the report
states, a strong majority of committee members have ’high levels of
satisfaction“ with the system. Furthermore, the report found ’ample
evidence“ that the Office of the U.S. Trade Representative and other
executive branch agencies are ’informing advisers about developments in
U.S. trade policy and seeking their input, formally and informally, on
key initiatives.“:
Your report identifies some components of the system that could benefit
from strengthening, including the timeliness of consultations,
mechanisms for feedback to committees, alignment of committee structure
with the current U.S. economy, and resources devoted to management of
the system. The following comments address GAO‘s four recommendations
contained in the draft report:
USTR is developing internal guidelines clarifying procedures for
consulting with trade advisory committees. The agency also is working
with the Departments of Commerce, Agriculture, Labor, Environmental
Protection Agency, and Defense to coordinate communications strategies;
USTR, working with the Departments of Commerce, Agriculture, Labor,
Environmental Protection Agency, and Defense, is continuing to seek
qualified candidates to serve on committees as vacancies arise. USTR
also supports GAO‘s recommendation that Congress amend the Federal
Advisory Committees Act to extend the two-year rechartering requirement
for the trade policy advisory committees;
USTR is consulting with security agencies to identify solutions for
streamlining the security clearance process;
USTR is exploring the feasibility of technological solutions for
consulting with advisors, including webcast technology, which was used
successfully at the World Trade Organization negotiations in Doha,
Qatar, last November. USTR also hopes - pending budget approval and
certification by security officials - to build a password-protected
encryPted website for advisors so they can obtain information in a
timely and convenient manner.
USTR is committed to ensuring that the advisory committee system
continues to meet the objectives set by Congress of providing frank and
representative advice on U.S. trade policy. Your report provides a
valuable overview of the system, and offers ideas for improvements that
match our own goals for strengthening the system. We appreciate the
time and attention of your auditors, and are grateful to have had the
opportunity to give our input during the final drafting of this report.
Josette Shiner:
Associate U.S. Trade Representative:
USDA:
United States Department of Agriculture:
[End of section]
Appendix VII: Comments from the U.S. Department of Agriculture:
AUG - 5:
Farm and Foreign Agricultural Services:
Foreign Agricultural Service:
Mr. Loren Yager, Ph.D.
Director, International Affairs and Trade U.S. General Accounting
Office:
441 G Street, N.W. Washington, D.C. 20548-0007:
1400 Independence Ave, SW:
Stop 1001 Washington, DC 20250-1001:
Dear Dr. Yager:
Thank you for the opportunity to provide comments on the General
Accounting Office‘s (GAO) draft report GAO/02-876, ’INTERNATIONAL
TRADE: Advisory Committee System Should Be Updated to Better Serve U.S.
Policy Needs.“ For this report, requested by Senator Charles E.
Grassley, GAO examined the advisory committee system‘s role, structure,
and operations to assess if the system meets the 1974 legislative
objectives for input by the private sector as trade negotiations
unfold.
In particular, GAO reviewed the management of the advisory committee
system by the lead agency, the Office of the United States Trade
Representative (USTR), along with five other agencies, including the
U.S. Department of Agriculture (USDA). As a result of the eleven-month
review, GAO concludes that while the advisory committee system provides
value in U.S. trade policy and most members are satisfied with their
committee, the responsible agencies need to strengthen the system‘s
capacity to contribute to U.S. trade policy.
We appreciate that GAO confirms that there is general member
satisfaction with the system while substantiating what we too believe
are areas for improvement. Recognizing the need to shore up the
process, USDA in cooperation with USTR developed and implemented a
communications strategy to clarify interaction between USDA and USTR
and strengthen the interaction with the advisory committee members. The
enclosed paper dated January 30, 2002, describes USDA and USTR‘s
leadership and management responsibilities and establishes procedures
for formal and informal communications with committee members.
The following comments address GAO‘s four recommendations contained in
their draft report:
Recommendations 1: To adopt or amend guidelines and procedures to
ensure those consultations are timely, continual, and_ meaningful.
USDA in cooperation with USTR will revise the January 30, 2002,
Communications Strategy to establish a process so that members are
notified in a timely manner.
USDA is an Equal Opportunity Employer:
A calendar of upcoming negotiations will be developed and updated on a
continuing basis to share with the members.
USDA frequently met with the advisory committees in the past nine
months (October 2001 and February, May, and July 2002). USDA and USTR
carefully planned the agendas to allow sufficient time for advice and
counsel of the members, limiting the agenda topics and presentations‘
length. For the Agricultural Policy Advisory Committee (APAC), the top
leadership from USDA and USTR were available for most, if not all, of
the meeting‘s agenda.
Recommendation 2: To increase outreach efforts to fill and revitalize
membership.
For the 2002 rechartering and nomination process for the agriculture
trade advisory committees, USDA made a concerted effort to maximize
outreach. Contacts included: 1,062 constituents on the USDA Outreach
List, 50 Farm Service Agency state executive directors; 16 Cooperative
State Research, Education, & Extension Service electronic mailing
lists; American Farm Bureau Federation state directors; Agricultural
Research Service headquarters and regional directors; 70 Foreign
Agricultural Service (FAS) Foreign Market Development Cooperators and
Market Access Program participants; and 100 State Commissioners of
Agriculture and State Agriculture Department‘s Communication Officers.
In addition, USDA published two Federal Register notices to solicit
committee nominations.
USDA revitalized the advisory committees‘ representation. For example,
the APAC‘s past membership was mostly comprised of representatives of
commodity interests. For the 2001 nomination process, USDA sought
people with broad experience in food and agriculture trade policy that
were well known and widely respected throughout the domestic and
international industry. To balance the membership, nominations were
encouraged from all geographic regions, commodities and products,
producer and processor organizations, and trade facilitating
organizations.
In addition, USDA is establishing a processed foods technical advisory
committee for trade, reflecting the importance of high-value products
in the export market. High-value products now account for two-thirds of
total export sales compared with only half in 1990.
Recommendation 3: To streamline the nomination and appointment process
for committee members and prevent_ lapses in committee charters.
USDA streamlined the 2001 nomination and appointment process.
Nominations closed at the end of June 2001, and on September 6, 2001,
all the appointment letters were sent to the newly appointed members -
a quick turnaround of less than 8 weeks. The documentation is enclosed.
The lapse in the agriculture advisory committee‘s charter has been a
problem and will be a challenge when the current charter expires in
April 2003. To prevent the charter from expiring, USDA must begin the
nomination process in January 2003 - 18 months from the last renewal.
In the best of circumstances, processing the paperwork with over 200
applications is a time consuming responsibility. Part of the solution
would be to change the Federal Advisory Committees Act‘s (FACA) 2-year
rechartering requirement. We firmly support GAO‘s recommendation for
Congress to authorize exceptions to the FACA to allow exemptions to the
2-year rechartering requirement for the trade advisory committees.
Recommendation 4: To provide sufficient technological and human
resources to support meaningful consultations and ensure effective
functioning of the system.
USDA agrees that we need to increase the use of technology. Efforts are
underway to establish a secure website to communicate on a more regular
basis with the committee members on trade sensitive information. USDA
will explore other means to maximize computer technology for more
efficient management of the advisory committees.
Concerning human resources, the FAS Legislative Affairs Office,
responsible for managing the agriculture trade advisory committees,
will be fully staffed by October 2002, providing sufficient resources
to manage the committees.
The security clearance process continues to be a challenge. FAS is
hiring a Security Officer who will assist in managing the security
process. In anticipation of potential problems, FAS will also work
closely with USTR and USDA Security Offices to expedite the security
clearances in the next appointment process.
USDA is committed to continue working with USTR in further refining the
trade advisory committees‘ management. The ongoing efforts will be
expanded to include GAO‘s recommendations. Again, we appreciate the
opportunity to provide comments on this important subject.
A. Ellen Terpstra Administrator:
Signed by A. Ellen Terpstra:
COMMUNICATIONS STRATEGY WITH USTR AND TRADE ADVISORY COMMITTEE MEMBERS:
PURPOSE:
There is a renewed commitment by USDA and USTR to improve
communications between the two responsible staffs concerning the
Agricultural Policy Advisory Committee (APAC) and the Agricultural
Technical Advisory Committees (ATAC). Similarly, both staffs are
dedicated to strengthening the dialogue with the trade advisory
committee members by facilitating consultations and obtaining
information and advice from the members on a continuing and timely
basis.
Working with the International Trade Policy program area, the FAS
Administrator, the ATAC Executive Secretaries, the Legislative Affairs
Office, the Under Secretary for FFAS, and USTR the following steps are
recommended:
Communications and Coordination with USTR:
Matt O‘Mara, representing the Under Secretary, will be the lead person
coordinating with Sharon Bomer, USTR on critical and sensitive matters
concerning the trade advisory committees, and will troubleshoot and
facilitate communications between FAS and USTR.
Sharon McClure will manage the day-to-day matters relating to the trade
advisory committees, and work closely with Matt O‘Mara to plan and
implement committee business. Her principle contacts in USTR will be
Sharon Bomer and Christina Sevilla. In addition, Sharon McClure will
coordinate trade committee activities within FAS with the International
Trade Policy program area and the five ATAC Executive Secretaries, to
inform, advise and clear matters with the FAS Administrator. In
addition, she will serve as the Executive Secretary for the APAC.
Procedures:
* Setting Committee Meeting Dates: FAS in conjunction with USTR will
recommend possible dates for upcoming meetings. Matt O‘Mara will
finalize the dates with the Under Secretary and Office of the
Secretary, and Sharon Bomer and Christine Sevilla will confirm with
USTR leadership.
Agenda Planning: For both APAC and ATAC agendas, Sharon Bomer and FAS,
including ITP representative(s), appropriate Executive Secretary, Matt
O‘Mara, and Sharon McClure, will jointly develop a draft agenda to
allow all parties to be involved from the onset. Matt O‘Mara will
ensure USDA and USTR leaderships‘ approval.
Chairing Committee Meetings: APAC and ATAC members will vote on a
Chairperson to run the meetings, respectively. Both FAS Executive
Secretaries and USTR leadership will remain in attendance while the
APAC and ATAC meetings are in session.
Committee Minutes: As required by the USDA Trade Advisory Committee
Procedures and Rules, the official minutes will include:
Content:
1) Meeting time, date, and place;
2) List of attendees, including committee members, committee staff and
Department employees;
3) Accurate description of each matter discussed and resolution, if
any;
4) Copies of all reports or other documents received, issued, or
approved by the committee, if appropriate; and,
5) A description of public participation in all meetings open to the
public and a list of who attended the meetings.
Distribution:
To ensure communications of the committee members‘ interests, the APAC
and ATAC minutes will be distributed to committee members, USTR
leadership, the FAS Administrator, Deputy Administrators, and the APAC
Executive Secretary in the Legislative Affairs Office.
Consultations with Committee Members:
The following procedures will be followed for formal and informal
communications:
1) Formal - Committee Resolutions and Trade Concerns:
For each committee meeting, the Executive Secretaries will draft an
informational memorandum from the FAS Administrator to the Secretary,
the USTR and the Under Secretary (clear through Sharon McClure and
Sharon Bomer) that provides:
Resolutions passed by the committee deemed appropriate for action,
recognizing resolutions do not require the full consensus of the
membership.
If after consultation with USTR, action is recommended, also draft an
options memo from the FAS Administrator to the Secretary, USTR if
appropriate, and the Under Secretary outlining the recommendations.
Description of the priority/sensitive issues debated by the membership.
To clarify required Department action concerning committee advice or
recommendations, 19 USCA Sec. 2155 states USTR/USDA. . . ’shall not be
bound by the advice or recommendations of such advisory committees, but
shall inform the advisory committees of significant departures from
such advice or recommendations made. . .“:
2) Informal Communications:
To encourage routine feedback, comments, questions, or other forms of
exchange, FAS will institute procedures to communicate regularly with
committee members. The following procedures will be followed:
’International Trade Policy Monthly“, a monthly electronic newsletter
for APAC/ATAC members will be drafted by the International Trade Policy
area in cooperation with the Legislative Affairs Office and the
Commodity and Marketing Programs area, drawing from the FAS Weekly
Report to the Under Secretary. Items in the report will be organized
within the following categories by priority: multilateral, bilateral,
and regional. A calendar of upcoming events also will be included.
Example Attached.
FAS contact names and numbers will be included at the end of the
report. The Trade Policy staff, FAS Administrator, and USTR will review
and clear the monthly report. The APAC/ATAC Executive Secretaries will
transmit the report to their members by the 15tH of each month.
USTR Press Releases and Memoranda: As in the past, APAC/ATAC Executive
Secretaries will continue to forward to committee members relevant
press releases, policy documents, and other materials that USTR
requests to be sent.
Executive Secretaries will continue to respond to questions and e-mails
from individual members. The Executive Secretaries will forward any of
these communications to other USDA and USTR personnel as needed.
W:\TradeAdvisory Committees\COMMUN-1, January 24, 2002:
ACTIONS TAKEN BEGINNING MAY 19 TO AUGUST 8:
2001 TIME LINE ACTION:
May 19:
Federal Register notice announcing USDA/USTR reestablishing the APAC
and ATAC Committees; requesting Committee nominations:
June 6:
Memo from M. Chambliss to H. Shipman requesting guidance and providing
draft time line:
June 15:
Under Secretary Penn‘s memo to Secretary Veneman notifying her of the
two week extension of the nominations; list of nominees received to
date:
June 19:
Federal Register notice announces extension of the deadline by 2 weeks
to ensure that every effort has been made to solicit broad
representation on the Committees:
June 21 and 22:
Memos to White House Liaison and OCR providing list of all nominees for
USDA clearances:
June 26:
Memo from M. Sharpless to Dr. Penn re applications received from June
19 to June 26:
July 5:
Memo from M. Sharpless to Dr. Penn providing list of nominees By
Committee, By Region-Organization, and by Organization along with the
list of 14 APAC nominees at 6 year limit:
July 12:
Memo from M. Sharpless to Under Secretary Penn providing criteria for
selection and list of nominees received to date:
July 16:
Preliminary list of APAC nominees from Dr. Penn with instructions to
move other APAC members to appropriate ATAC Committees:
August 8:
Memo from M. Sharpless to Dr. Penn on procedures to finalize membership
selection and planning for the first Committee(s) meeting (s):
s:\shared\apac\apac2001 nominations\chronology.past. future. j b.
81601:
ACTIONS REQUIRED TO ENSURE OCTOBER 12 MEETING(S):
[Empty]; RECOMMENDED TIME LINE; ACTIONS.
*; August 13 - 17; Verify accuracy of nominees lists (completed).
[Empty]; [Empty]; Draft appointment letter (rough draft).
[Empty]; [Empty]; Verify mailing list for CCU (completed).
[Empty]; [Empty]; Draft waiver letter (completed).
[Empty]; [Empty]; Reconcile nominee clearances with White House.
[Empty]; [Empty]; Liaison (completed).
*; August 20 - 24; Forward waiver memo to Lou Gallegos, Assistant.
[Empty]; [Empty]; Secretary for Administration.
[Empty]; [Empty]; Consult Secretary‘s schedule to determine
availability.
[Empty]; [Empty]; for meeting dates.
[Empty]; [Empty]; Clear draft appointment letter up to Dr. Penn.
[Empty]; [Empty]; Provide CCU mailing list.
*; August 28 - 31; Final decision on Committees‘ membership with info.
[Empty]; [Empty]; memo to Secretary Veneman for her concurrence,.
[Empty]; [Empty]; which allows only 30 days to arrange for an October.
[Empty]; [Empty]; 12 (tentative date) for first Committee meetings.
*; September 3 - 6; l. Mail out appointment letters (requires
Secretary.
[Empty]; [Empty]; Veneman and Zoellick‘s signatures). Recommend.
[Empty]; [Empty]; including date of first Committee meeting..
[Empty]; [Empty]; 2. Determine how the first meeting will be
structured,.
[Empty]; [Empty]; i.e., plenary session (open, closed meeting and/or.
[Empty]; [Empty]; separate APAC/ATAC meetings following general.
[Empty]; [Empty]; session).
[Empty]; [Empty]; 3. Draft meeting agenda in cooperation with USTR.
[Empty]; [Empty]; 4. Arrange Committee meeting room, Jefferson.
[Empty]; [Empty]; Auditorium for Plenary meeting.
[Empty]; [Empty]; 5. Arrange court reporter.
[End of table]
…An open meeting requires a Federal Register Notice 15 days prior to
the meeting date. Closed meeting requires USTR approval and is based on
agenda topics.
The following is GAO‘s comment on the Department of Agriculture letter
dated August 5, 2002.
GAO Comment:
1. Regarding our findings that the nomination and appointment process
is slow and cumbersome, USDA indicated that it took steps to streamline
the process during the most recent rechartering period. We appreciate
that the rechartering was completed within 4 months of being started.
However, we note that it did not begin until May 2001---more than a
month after the APAC and ATAC charters had expired in March 2001. As a
result, as our report indicates, none of the six agricultural advisory
committees met during the April to October 2001 period. Moreover, we
note that USDA indicated in a July 2002 meeting with us that many
advisers appointed to the current charter term have yet to receive
final security clearances.
[End of section]
Appendix VIII: Comments from the Department of Commerce:
UNITED STATES DEPARTMENT OF COMMERCE The Under Secretary for
International Trade Washington, D.C. 20230:
Loren Yager:
Director, International Affairs and Trade United States General
Accounting Office Washington, D.C. 20548:
Dear Loren:
Thank you for sharing with us the draft United States General
Accounting Office (GAO) report entitled, ’International Trade: Advisory
Committee System Should Be Updated to Better Serve U.S. Policy Needs,“
and for the opportunity to comment on the report. We believe the report
is, in general, thorough and fair, and your investigative team deserves
credit for a job well done.
In particular, we believe the report, as well as its conclusions and
recommendations, affirms our view that the United States Trade Advisory
System constitutes a highly productive partnership between the United
States Government and the private sector in a significant policy area
that is unique among the United States and its trading partners, and
has made a tremendous contribution to our national economic well-being.
Of course, every program as large, diverse, and important as this needs
to be managed as efficiently and effectively as possible, and we will
study the report‘s recommendations carefully.
Based on our very thorough review of the draft report, we have a number
of comments and corrections. They are enclosed for your consideration.
Again, thank you for your work in producing this report.
Sincerely,
Grant D. Aldonas:
Signed by Grant D, Aldonas:
U.S. Department of Commerce Technical Comments on Draft United States
General Accounting Office (GAO) Report Entitled, ’International Trade:
Advisory Committee System Should Be Updated to Better Serve U.S. Policy
Needs“ (GAO-02-876):
A. Timeliness, Ouality, and Accountabilitv of Consultation Process:
The GAO has identified three aspects of the trade advisory committee
consultation process that it believes could be improved: timeliness,
quality, and accountability.
1) Timeliness: Consultations were not always timely enough to have an
impact on U.S. policy, in part because certain committees have not met
at all or meet irregularly. [Page 6, para. 1; Pages 16, 19, 20]
Comments: The Draft Report underplays the fact that, according to the
GAO survey, 62 percent of the members responding felt that
consultations were held on a timely basis to a moderate or great extent
(another 8 percent did not respond to this question).
The Draft Report should make clear that with regard to the third-tier
Industry Sector and Functional Advisory Committees (ISACs and ISACs),
jointly administered by the United States Department of Commerce
(Commerce) and the United States Trade Representative (USTR) through
the Industry Consultations Program (ICP), two of the ISACs meet on a
monthly basis and the rest typically meet four to six times a year. The
Designated Federal Officer (DFO) of each committee schedules meetings
in consultation with the Committee Chair, who in turn frequently
consults with the membership regarding the need for and scheduling of
additional meetings. Because members must pay for their own travel to
Washington, D.C., in scheduling meetings the DFO and Chair must balance
the need for timely consultations against the need for advance planning
in order to permit orderly scheduling and avoid placing undue financial
burdens on committee members and their companies.
The Draft Report should accord greater emphasis to the fact that, in
order to ensure timely consultations on fast-moving issues and to
reduce costs, Commerce and USTR have been using their information
technology (IT) resources increasingly effectively over the past
several years, particularly by releasing more information and documents
via e-mail for review by ISAC and IFAC members. The Draft Report points
out (page 16) that in FY01, USTR scheduled at least nine ad hoc
meetings, mostly teleconferences or in-person meetings, and faxed at
least 63 requests for advice, usually addressed to the entire advisory
system membership or all of the ISACs and ISACs, with an average of 7.5
days to respond. During the same period, the Industry Consultations
Program, in conjunction with USTR, sent out to ISAC and IFAC members
approximately 139 distributions of which 84 were for request for
comments (other distributions included USTR press releases and other
trade policy issues of interest). In FY02 to date, the ICP has sent out
by e-mail over 135 requests for:
comments, press releases, and other information of importance to ISAC
and IFAC members, outside of the normal committee meeting schedules.
Although USTR does often require quick turnaround times for requests
for comments on fast-moving issues, USTR has allowed ISAC and IFAC
members to contact the trade negotiator directly and has assured our
ISAC and IFAC members that their comments would still be accepted
beyond the due date. On many occasions, the ICP has requested
extensions from USTR on request for comments so that IFACs and IFACs
can meet on an issue and have enough time to formally respond.
The Draft Report should also mention that Commerce has also begun
research on upgrading its technology to allow trade-sensitive documents
to be viewed over a secure interactive website. As GAO has noted, the
costs of such solutions are potentially very high, and will have to be
balanced against other pressing budgetary needs.
The Draft Report states (page 19) that ’members who we surveyed“
reported instances of advice being sought after decisions are made; and
that ’several members“ reported a ’tendency“ toward seeking views after
the fact. Given that 62 percent of the members are reportedly satisfied
with the timeliness of consultations, we think these assertions clearly
do not represent the majority view; as such, they should either be more
precisely stated or dropped.
The Draft Report states (page 20) that Commerce‘s and USTR‘s procedures
and rules ’do not address the principle of timeliness or consulting to
the maximum extent feasible.“ The Draft Report should make clear that
these procedures and rules apply only to IFACs and IFACs jointly
administered by Commerce and USTR, and not to the first-and second-tier
committees cited as having the most acute meeting-scheduling problems.
The procedures and rules are based upon the legal framework created by
section 135(c) of the Trade Act of 1974, as amended, the Federal
Advisory Committee Act (FACA), and other laws and Executive Orders
relating to the handling of security classified information, public
access to information, and other matters. The procedures and rules
leave it up to the DFO, the Chair, and respective committee members to
set their meeting schedules.
2) Quality: Members and negotiators believed that the consultations
were
not always meaningful or useful, and that in some cases, tight meeting
agendas were not conducive to fully vetting issues and formulating
committee advice. In other cases, committees were asked to comment on
complex initiatives, but were given little time to review the
initiatives and limited access to key documents. [Page 6, para. 1;
Pages 21, 22, 25, 26]
Comments: The Draft Report should reflect that, because of the costs
and travel time associated with ISAC and IFAC meetings, and the number
of issues to be discussed, most meetings frequently include a very full
agenda. Meetings typically feature all-day agendas in order to cover
necessary
topics as thoroughly as possible as well as make the best use of out-
of-town
members‘ time. Meetings typically commence at 8:45 a.m. and last until
3:00
p.m. or later, with members typically working through lunch. Every
effort is
made to schedule as much time as possible for thorough discussion and
deliberation on each major topic.
The Draft Report notes (page 22) that ’officials and members said that
being able to access documents electronically, such as through an
encoded internet site, would improve quality of committee advice. While
we do not disagree, we believe the Draft Report could better reflect
the overriding importance of adequately safeguarding classified and
trade-sensitive materials. Commerce and USTR have continuing and
legitimate concerns regarding their ability to safeguard classified and
trade-sensitive information from inadvertent release. On three recent
occasions, extracts of negotiating texts of the U.S.-Chile Free Trade
Agreement, not publicly released, have appeared in private trade
publications. Commerce is actively researching creating and maintaining
a secure, interactive website for use by ISAC and IFAC members;
however, we have determined that the cost is considerable
(approximately $200,000 for an effective system) and our resources are
limited. Although Commerce and USTR recognize that security leaks are
rare among advisory committees, electronic access to documents can be
offered only in conjunction with adequate provision for security.
The Draft Report (pages 25, 26) states that ’members and negotiators
believe the system‘s capacity for cross-fertilization among committees
should be strengthened. Although functional committees on issues such
as customs and standards have been established and are supposed to
include representatives from industry committees, participation by them
is reported to be limited.“ 1The Draft Report should reflect that
Commerce and USTR established the Committee of Chairs of the ISACs and
IFACs to bring to the table the cross-cutting issues of their
respective committees. In addition, we note that ISAC and IFAC advice
is considered to have been submitted in confidence and the statute
provides that such advice may be shared with only a specified number of
people; therefore, Commerce and USTR have provided access to committee
advice only to those individuals provided for in the statute on a need-
to-know basis.
3) Accountability: Members were concerned that the system‘s
consultation
process provides little accountability to ensure that advice is
considered. The lapse of trade negotiation authority eliminated the
committees‘ channel for reporting to Congress, and many members stated
that executive branch officials are not:
This sentence should be changed to ’Although functional committees on
issues such as customs, standards, intellectual property rights, and
electronic commerce have been. . . ’informing them of ’significant
departures from advice,“ as the law requires.
[Page 6, para. 1; Pages 28-29]
Comments: Commerce and USTR consider all advice rendered by the
committees to be of the utmost importance, and believe that it receives
significant weight in the formulation of trade policy and trade
negotiating positions. Commerce believes that, overall, the GAO Survey
supports this belief, and that the Draft Report ought to reflect more
prominently this conclusion. We believe that ’significant departures“
from committee advice are extremely rare, and that in those infrequent
instances committee members are appropriately informed.
The Draft Report refers to a statement by one DFO that ’committee
letters are not always sent to officials responsible for the issues
involved. . . .“ Commerce believes this reference is misleading, does
not represent the substantial practice of the agencies or the overall
views of committee members, and is limited to a very small number of
isolated instances. Furthermore, it confuses the issue of with whom the
advice is shared with the issue of whether and how it is acknowledged.
ISAC and IFAC advice is primarily rendered orally during committee
meetings while trade negotiators are present. When formal ISAC and IFAC
written advice is sent to the Secretary of Commerce, it is reviewed by
his policy staff and then the appropriate ITA unit is tasked to prepare
the draft response. Commerce internal procedures require that all
responses for Secretarial signature go through a concurrence process
which includes clearance on the response by the official responsible
for the issue. Although there are several clearance levels, the
concurrence process ensures that the appropriate level Commerce
officials are seeing the advice and have a chance for comment. All
responses from ITA units must be approved by the Under Secretary of
Commerce for International Trade prior to signature by the Secretary of
Commerce, which ensures that ISAC and IFAC advice is weighed and
considered.
The Draft Report should recognize that in those instances where agency
responses may be characterized as ’pro forma,“ this is generally
because final decisions regarding the advice, or the underlying issue,
have yet to be made.
B. Structure and Composition of the Trade Advisory Committee System:
The Draft Report contains a number of conclusions regarding the
structure and composition of the Committees with which Commerce finds
potentially misleading or inadequately supported.
1) The trade advisory committee system has not been updated to reflect
changes in the U.S. economy and U.S. trade policy, and is largely the
same as it was in 1980, even though the focus of U.S. trade policy has
shifted from tariffs toward other complex trade issues such as
protection of intellectual property rights ... and as: a result the
system
has gaps in its coverage of industry sectors, trade issues, and
stakeholders.
[Page 6, para. 2; Page 33]
Comments: Since 1980, Commerce and USTR have made changes to the
sectoral and functional committees‘ structure, including creating an
Industry Functional Advisory Committee on Intellectual Property Rights
(IFAC-3) in 1986; abolishing the Industry Policy Advisory Committee in
1998; and with the emergence of the electronic commerce sector,
creating an Industry Functional Advisory Committee on Electronic
Commerce (IFAC-4) in 1999. Commerce and USTR will continue to work
together in re-evaluating sectoral and functional advisory committee
alignments to ensure that the ISACs and IFACs adequately reflect the
changing U.S. economy.
As GAO has noted, there need be no ’automatic and linear relationship
between …trade levels‘ and committee membership.“ Indeed, committee
structure and membership are necessarily based on a number of factors,
including industry interest, current and pending trade policy issues,
specific issues in ongoing trade negotiations, general level of
Washington representation, export competitiveness, import sensitivity,
and other factors besides raw export numbers.
Commerce and USTR actively and continuously recruit nominations for
membership from all sectors of the U.S. economy, in a wide range of
venues, and will continue to do so. We attempt to portray active
participation in the most favorable possible terms, while recognizing
that it places substantial financial and programmatic demands on the
participants. However, as GAO recognizes in the Draft Report, the
choice whether to participate in the system ultimately lies with
industry.
2) Representation of the Services sector has not kept pace with its
growing importance to U.S. output and trade. [Page 6, para. 2; Pages
29-33]
Comments: Commerce does not agree that the services sector is
inadequately represented on the third-tier sectoral and functional
level. The Industry Sector Advisory Committee on Services (ISAC-13) is
one of the most active committees in the ICP and meets on a monthly
basis. The committee currently has 32 very active members. The Draft
Report should afford greater prominence to the fact that a majority of
the members of the Services ISAC who responded to the GAO survey have
expressed satisfaction with the level of sector representation on the
Services ISAC.
3) Certain manufacturing sectors, such as electronics, have fewer
members than their sizeable trade would indicate. [Page 6, para. 2;
Page 32]
Comment: As the Draft Report points out (page 32), there need be no
’automatic and linear relationship between trade levels and committee
membership.“ Committee membership can depend in part on the number and
prominence of issues raised by pending trade negotiations, as well as
other issues such as import sensitivities.
Commerce and USTR amended the charter of the Electronics and
Instrumentation ISAC for the 2002-2004 charter period to allow members
from the software industry to be included on the committee. Commerce is
now actively recruiting new members from the software industry.
Depending on the number of new members from the software industry,
Commerce and USTR have already decided to re-evaluate ISAC-5 at the
next re-chartering in 2004 to reconstitute the committee and change the
committee‘s name to reflect changes in the electronics and
instrumentation sector.
4) Participation of Foreign-Controlled Firms. [Page 33]
The Draft Report states (page 33) that ’major companies, such as
DaimlerChrysler, cannot participate because foreign-owned companies
are prohibited from membership on many of the committees.“ Commerce
believes the Draft Report should note and explain USTR‘s longstanding
policy against including foreign and foreign-controlled firms among
committee membership. The policy is based on the sensitivity of the
subject matter considered by the committees and the possible conflicts
that would be experienced by U.S. firms that have foreign owners. We
recognize that in today‘s more globalized economy, this policy may
occasionally appear anomalous; however, we believe it continues to be a
sound policy and there is no current intention to revisit it.
5) Participation Levels and Outreach. [Pages 34, 35]
The Draft Report states (page 34) that Committee membership averages
only ’49 percent of authorized capacity.“ This statement implies both
that the committees are under-enrolled, and that ’authorized capacity“
of a committee represents a reasoned conclusion as to how many members
that committee should have. In fact, neither is the case. ’Authorized
capacity“ is a somewhat arbitrary figure, based principally on the FACA
limit of 50, with enough leeway built so that reasonably anticipated
increases in membership should not require that the charter be amended.
Because the ceiling is arbitrary, membership ’percentages“ based on the
ceiling are not particularly useful. Also, Section 135 (c)(2)(B) of the
Trade Act, as amended, allows Commerce and USTR to take into account
’the necessity for reasonable limits on the number of such advisory
committees“ and ’the necessity that each committee be reasonably
limited in size.“:
For the record, corrections to Figure 7 (page 35) of the Draft Report
(as rounded to the nearest percent) are attached.
The Draft Report states (page 34) that the agencies ’often rely on
passive recruitment through the Federal Register...... This statement
is misleading. As part of the biennial re-chartering process, Commerce
places notices in the Federal Register on a recurring basis. However,
these notices are merely the starting point - a legally required
threshold - for Commerce recruitment and outreach efforts. Commerce
officials recruit for the committees in many venues and fora. Commerce
has increased its already significant outreach and recruitment efforts
by
holding ISAC and IFAC meetings outside of Washington, D.C., with either
open/partially open meetings for the public to attend, speaking before
trade associations and outside groups on the ICP, and coordinating
trade shows and events with our U.S. Export Assistance Centers to help
recruit new members.
As noted above, Commerce and USTR actively and continuously recruit
nominations for membership from all sectors of the U.S. economy, in a
wide range of venues, and will continue to do so. We attempt to portray
active participation in the most favorable possible terms, while
recognizing that it places substantial financial and programmatic
demands on the participants. However, as GAO recognizes in the Draft
Report, the choice whether to participate in the system ultimately lies
with industry.
6) Nonbusiness membership. [Pages 6, 10, 38, 39, 40]
The Draft Report states (page 6) that ’nonbusiness stakeholders report
being marginalized ... because they are permitted membership on
relatively few committees...... On page 38, the Draft Report further
states: ’Most nonbusiness members currently participating in the system
are placed on a few committees in the second tier. . . ’:
Commerce believes that treatment by the Draft Report of the issue of
nonbusiness participation may be somewhat misleading. First, the Draft
Report should contain a more detailed and specific discussion of the
Congressional delegation as evidenced in the statute, particularly in
distinguishing the functions and make-up of each of the three ’tiers“
of committees. For example, the statute provides specifically for
representation of consumer interests only in the first tier committee,
the ACTPN - not in the second or third tiers. Likewise, environmental
interests are specifically provided for only in the first tier.
Although the Draft Report implies that environmental and labor
interests have been ’relegated“ to ’a few committees in the second
tier“ (page 38), in fact their representation on committees such as the
TEPAC - established by Executive Order --actually goes beyond what the
statute requires. (As noted elsewhere in the Draft Report, this attempt
to ’marry“ inconsistent interests in one Committee is widely regarded
as unproductive.):
The Draft Report notes (page 10, para. 1; pages 39, 40) that one of
FACA‘s requirements is that advisory committees be ’fairly balanced“ in
terms of points of view represented and the functions the committees
perform. We think this issue could benefit from a more clearly focused
discussion. With regard to ’fairly balanced,“ Commerce and USTR have
interpreted this to mean ’fairly balanced“:
[Z] The Trade and Environmental Policy Advisory Committee was created
pursuant to Presidential Executive Order Number 12905, March 25, 1994.
among industry points of view. We believe this is a reasonable
interpretation, well supported by the legislative history, and our
legal position is that section 135(c) of the Trade Act, as amended,
allows the President to establish sectoral and functional committees
comprised solely of industry representatives.
The Draft Report refers (page 39) to ’successful legal challenges“
brought by nonbusiness groups; however, it should make clear that the
Clinton Administration elected not to pursue a pending appeal in one
case, and the current Administration voluntarily settled the second
case.
However, the Draft Report does fairly conclude that until the issue of
nonbusiness participation is clarified, there will continue to be
confusion and ambiguity in this area.
C. Management Issues:
1) Leadership direction and administrative support by USTR and the
other
managing agencies. [Page 7]
The Draft Report states (page 7, para. 1) that ’leadership direction
and administrative support by USTR and the other managing agencies have
not been sufficient to ensure that the advisory committee system works
as intended.“ Commerce does not agree with this conclusion of the Draft
Report.
Commerce and USTR believe that the ICP is effectively managed and is
functioning effectively as intended by Congress. Commerce has a good
working relationship with USTR and will continue to work more closely
in providing leadership for the ISACs and IFACs. USTR oversees a large
number of committees and it is a small agency. Of the 34 trade advisory
committees in the system, Commerce is responsible for 22 of them, and
believes it is making available adequate resources for managing the
system, given competing budgetary priorities. The average cost to
administer each of commerce‘s 22 committees is approximately $50,000
(excluding travel). Commerce will shortly hire an additional two FTEs
to work solely on ICP management.
Both agencies have a broad mandate and many other statutory
responsibilities, and operate under tight budgetary constraints. Our
resources are properly and appropriately allocated to meet our many
responsibilities. Commerce is committed to improving the efficiency of
the advisory committee operations, and is taking many steps to do so
within its existing budget.
D. Miscellaneous Comments:
Commerce has the following additional technical comments on the Draft
Report:
Enclosure:
1) USTR has the discretion to create, change, and terminate committees
in the second and third tiers. [Page 10, para. 2]
Comment: USTR‘s discretion is to be exercised jointly with the relevant
Executive Department.
2) The advisory committees are administered by USTR, which assumes a
leadership role; the Departments of Agriculture, Commerce, Labor, and
the EPA. [Page 11, bottom]
Comment: The advisory committees are administered jointly by the USTR
and the Secretaries of Commerce, Defense, Labor, Agriculture, the
Treasury, or other executive departments as appropriate. EPA does not
administer any advisory committees under Section 135 of Trade Act, as
amended.
3) Footnote 11: The Committee of Chairs was established to advise the
Secretary and the USTR on trade matters.... [Page 12]
Comment: Change footnote 11 to ’The Committee of Chairs of the ISACs
and IFACs was established to advise the Secretary of Commerce and the
USTR. . . .“:
4) Footnote 13: ... and 303 accepted invitations to continue their
membership. [Page 14]
Comment: Correct Footnote 13 to read ’. . and 309 accepted invitations
to continue their membership.“ [ICP re-appointed 309 for 2002-2004
charter term.]
5) While the DFOs take and distribute both restricted and unclassified
summaries and minutes of the third-tier committee meetings, only
classified transcripts are kept for the first-and second tier
committees. [Page 16]
Comment: The sentence should read, ’The DFOs of the ISACs and IFACs
prepare classified minutes of closed meetings for internal committee
use only, and prepare unclassified public summaries. Only classified
transcripts. . .“:
6. Figure 8: Time-line for Trade Advisory Committees. [Page 37]
Comment: Since GAO is using the 1980 re-constituted period of advisory
committees for time-line, the arrow for the Committee of Chairs should
be moved to 1980 for alignment with the other ISACs and IFACs that were
re-constituted at that time.
Attachment:
ATTACHMENT - FIGURE 7 [Page 35]
ISACs --Committee Name Charter/Current Members/ Percentage:
Aerospace Equipment 30 17 56%:
Capital Goods 30 15 50%:
Chemicals and Allied Products 50 23 46%:
Consumer Goods 40 24 60%:
Electronics and Instrumentations 50 11 22%:
Energy 30 11 37%:
Ferrous Ores and Metals 30 14 47%:
Footwear, Leather and Leather Products 30 13 43%:
Building Products and Other Materials 30 10 33%:
Lumber and Wood Products 30 13 43%:
Non-Ferrous Ores and Metals 30 15 50%:
Paper and Paper Products 30 8 27%:
Services 50 31 62%:
Small and Minority Businesses 35 19 54% Textiles and Apparel 30 19 63%
Transportation, Construction, Mining:
and Agricultural Equipment 30 8 27%:
Wholesaling and Retailing 30 17 57%:
*IFACs Committee Name:
Customs Matters 20 12 60%:
Standards 25 14 56%:
Intellectual Property Rights 20 13 65%:
Electronic Commerce 30 17 57%:
*Note: Percentage is based for number of private-sector members the
IFAC charters allow. One member (or in exceptional circumstances two
members) from each ISAC may serve on each IFAC. Such service does not
count as additional company representation.
The following are GAO‘s comments on the Department of Commerce‘s letter
dated August 5, 2002.
GAO Comments:
1. The Department of Commerce stated that our draft report understated
member satisfaction with the timeliness of consultations, arguing that
62 percent of the respondents to our survey reported that consultations
were held on a timely basis to a moderate or great extent. We do not
agree with this characterization of our survey data. In our survey, we
asked to what extent the executive branch timed requests so that
committee input could be used in trade negotiations. Respondents
answered this question according to a five-point extent scale that
ranged from ’No extent“ through ’Very great extent.“ Only 25 percent of
respondents checked the top two categories, ’Great extent“ and ’Very
great extent.“ As the Department of Commerce notes, another 37 percent
of respondents checked the middle category on the scale, which was
’Moderate extent.“ If all three of these categories are added together,
they total 62 percent of respondents. However, we do not agree that all
three categories should be added together. Our report includes the full
range of responses to the question, adding together only the top two
(very great and great extent) and bottom two (some or little and no
extent) categories, and reporting those who checked ’to a moderate
extent“ separately. As the report already notes, 37 percent of
respondents reported that they were satisfied to a moderate extent, the
third point on a five-point scale. Furthermore, 30 percent checked the
final two points on the scale, ’Some or little extent“ and ’No extent.“
Consequently, we believe our finding that ’[C]onsultations were not
always timely enough to have an impact on U.S. policy . . .“ is
justified. Finally, we are accurately reporting member statements in
both the survey and interviews that there were instances when advice
was sought after the fact or not sought at all.
2. We agree that the frequency of meetings varies considerably across
committees, and we have added language to this report to that effect.
With respect to scheduling meetings on a timely basis, we recognize
that there is a tension between scheduling meetings far enough in
advance and scheduling additional meetings as needed. However, it is
clearly important to have timely consultations.
3. We recognize that Commerce, USTR, and USDA have made extensive use
of electronic transmissions to provide information to and seek input
from committee members. To capture the extent of such communication, we
reported on our analysis of such transmissions during fiscal year 2001.
Specifically, we calculated the number of times during fiscal year 2001
that USTR officials used electronic means to request comment from
advisers, including when USTR sent requests for comment to Commerce‘s
Industry Consultations Program (ICP) office, which relayed them to
advisers electronically. Our analysis yielded a result of 63 requests
for comments, rather than the 84 suggested by Commerce in its agency
comments. Commerce may have additional information not made available
to GAO about the content of each communication that could account for
the discrepancy between our counts of agency requests for comment in
fiscal year 2001. However, because GAO and Commerce are analyzing the
same data for the same period, the number of requests for comment is
certainly not 63 plus 84, as Commerce‘s comments imply. We welcome the
fact that use of electronic means to communicate with advisers is
continuing in fiscal year 2002, a period that was outside the scope of
our document review.
4. Commerce reports that USTR has been responsive to ICP requests to
extend deadlines for ISAC and IFAC members to provide comments on fast-
moving issues. However, we note that in earlier interviews ICP
officials told us that the reason they have requested extensions from
USTR was because members complained that the given deadlines were too
short to provide meaningful input.
5. We believe that, if implemented, the technological improvements
Commerce and USTR are pursuing to allow sensitive documents to be
viewed on a secure interactive Web site could help remedy member
concerns over access to key documents required for meaningful and
timely advisory committee input.
6. Regarding agency procedures, Commerce does not disagree with our
statement that Commerce‘s and USTR‘s procedures and rules ’do not
address the principle of timeliness or consulting to the maximum extent
feasible.“ However, it requests a clarification in the report to the
effect that these rules and procedures only apply to the ISACs and
IFACs operating at the third, technical tier of the advisory committee
system. But in reaching the conclusion that Commerce‘s and USTR‘s
procedures and rules do not address the principle of timeliness and
consulting to the maximum extent feasible, we examined procedures that
apply to all three tiers of the advisory process, including the first-
and second-tier committees having the most severe scheduling problems.
Specifically, we examined the procedures for the USTR-only, Commerce-
USTR, and USDA-USTR committees. The procedures for USTR-only committees
pertain to the first-and second-tier committees having the most acute
meeting scheduling problems. The Commerce-USTR procedures pertain to 22
of the third-tier committees. Neither the USTR-only nor the Commerce-
USTR procedures address the principle of timeliness or consulting to
the maximum extent feasible. The USDA procedures--which apply to six
committees at the second and third tierę also do not address these
issues. Although we recognize that the procedures are based on the
legal framework created by Section 135 of the Trade Act as well as
other laws and orders, Section 135 (i) states that it shall be the
responsibility of the United States Trade Representative, in
conjunction with the Secretary of Commerce and other executive
departments, ’to adopt procedures for consultation with and obtaining
information and advice from the advisory committees“ on ’a continuing
and timely basis.“:
7. Commerce recognizes that committee meetings frequently include a
very full agenda, but stresses that this reflects efforts to balance a
variety of factors, including cost, members‘ time, and the number of
issues to be addressed. We have added language to the report to this
effect, but we note that many survey respondents expressed a desire for
more time for committees to discuss issues and formulate advice. Survey
respondents and interviewees also indicated that the format of meetings
is sometimes not conducive to the two-way dialogue that would
characterize quality consultations. Formulation of advice is the
fundamental purpose of the advisory committees, and we urge Commerce to
consider time available for committee deliberations as it seeks to
structure meetings to make best use of members‘ time.
8. We have added language to the report noting Commerce and USTR‘s
concerns over safeguarding classified information.
9. We have added language to the report noting that Commerce and USTR
already have some mechanisms to bring to the table crosscutting issues
including the Committee of the Chairs of the ISACs and IFACs. We note
that according to documents we obtained from Commerce, that committee
met three times in fiscal year 1999, twice in fiscal year 2000, and
twice in fiscal year 2001.
10. Commerce notes that the statute places limits on sharing of advice
and information across advisory committees that could inhibit the trade
advisory committee system‘s capacity for cross-fertilization. Although
we agree that Section 135 places some limitations on the disclosure of
trade secrets and confidential information, it does not appear to
preclude provision of confidential information to designated advisory
committee members who possess the requisite security clearances.
11. Commerce asserted that significant departures from committee advice
are rare, and that in those infrequent instances committee members are
appropriately informed. This point of view is supported by the GAO
survey, in Commerce‘s opinion. In our survey, we asked committee
members how often the executive branch had pursued negotiating
strategies that significantly differed from the committee advice. One
hundred twenty committee members responding to our survey reported that
the executive branch significantly departed from their committees‘
advice about half of the time, or more frequently. These 120 members
constitute 25 percent of all respondents to our survey, and about one-
third of those who provided an answer to this question. While they, by
no means, constitute a majority of respondents, they do represent a
sizable minority. In any case, significant departures from committee
advice do not seem to be a rare event, as Commerce suggests. Our survey
then asked a follow-on question for respondents who indicated that
there had been significant departures from committee advice. Thirty
percent of those answering this question indicated that they had rarely
or never been informed of these significant departures. Another 21
percent of those who answered this question indicated that they had
been informed of significant departures about or less than half of the
time. As a result, we do not agree with Commerce‘s statement that
committee members are appropriately informed when there are significant
departures from advice. Section 135(i) clearly states that USTR ’shall
inform the advisory committees of significant departures“ from
committee advice or recommendations.
12. We have updated this report with the information Commerce provided
about its practices for handling formal letters from advisory
committees. We note that chairmen and members with whom we spoke
expressed some frustration about lack of feedback from the government
as to how it intends to use or respond to committee advice--a sentiment
not inconsistent with Commerce‘s practice of providing pro forma
responses to committee advice unless it has already made a final
decision on policy. Moreover, 21.9 percent of committee chairmen
responding to our survey reported that their committees written advice
was not acknowledged most of the time
(see Q25). In general, the members told us they want to have an
opportunity to influence policy before it is finalized and expressed
dissatisfaction when feedback on committee input was not substantive or
timely in nature.
13. Regarding changes to sectoral and functional committee, our report
already notes that only three committees have been created in the past
decade to respond to emerging needs. We believe that continued efforts
by Commerce and USTR to reevaluate the sectoral and functional advisory
committee alignments with the economy and trade policy needs are
warranted.
14. Commerce‘s position on the services committee is consistent with
the statements in this report that certain services negotiators and 70
percent of ISAC 13‘s members said that the services sector is well
represented in the system. However, we note that some negotiators with
whom GAO spoke made a point of saying that the services sector is a
large share of U.S. output and trade and that it is only represented in
2 of the 17 industry sector advisory committees; in the scheme of the
whole committee system, therefore, they stated that services is
underrepresented relative to manufacturing. This report has been
updated to note that Commerce has efforts under way to fill the gap in
representation of the software industry.
15. Commerce asks us to ’note and explain“ USTR‘s long-standing policy
against including foreign-owned or -controlled firms among committee
membership. Commerce indicates that this policy is based on the
sensitivity of the matters considered by the committees and the
possible conflicts that would be experienced by U.S. firms that have
foreign owners, and we have added language to this report to that
effect. However, we note that first, the U.S. government does not have
a uniform policy against inclusion of foreign-owned firms on the trade
advisory committees. USDA stated in its technical comments on our draft
report that it does not preclude foreign-owned firms from participating
in its trade advisory committees. Indeed, USDA indicates that at least
one foreign-owned or -controlled firm already participates. USDA
officials indicate that although foreign ownership can be considered in
the nomination review process, in practice, it was not actually
considered during the 2001 rechartering of the six USDA trade advisory
committees. Second, as to the rationale for the USTR/Commerce
exclusion, we note that there does not appear to be any bar in Section
135, FACA, and GSA implementing regulations specifically precluding
participation by foreign-owned or -controlled firms from having
representatives on trade advisory committees. The legislative history
of Section 135 does not deal directly with this issue, and in their
comments, neither USTR nor Commerce bases its long-standing policy on a
legal prohibition. Third, while we recognize Commerce‘s and USTR‘s
concerns about the sensitivity of the subject matters considered by the
committees, we note that neither Commerce nor USTR has provided us with
requested explanations of why the requirements that advisory committee
members obtain security clearances and sign a legally binding
nondisclosure agreement to protect classified information, along with
giving members procedural guidance on safeguarding trade sensitive
information, are not sufficient to address these concerns. Fourth, we
acknowledge that a majority of our survey respondents expressed
reservations about inclusion of foreign-owned firms in the system.
However, several members and negotiators still suggested that the long-
standing policy barring foreign-owned firms from membership altogether
should be revisited, in part because of the contribution to U.S.
employment and production that some of these firms provide. Indeed,
several U.S. negotiators reported to GAO that they already actively
work with foreign-owned firms on an informal basis during trade
negotiations, many of which are already members of key trade
associations.
16. Regarding participation levels and outreach, Commerce took issue
with our position that the number of members specified in each
committee‘s charter represents a proper level of membership. We note
Commerce‘s assertion that the ’authorized capacity“ numbers specified
in each committee‘s charter are ’somewhat arbitrary,“ but we hold that
they do provide useful guidance regarding committee size. Each
committee charter specifies that it ’consists of approximately X
members,“ and each committee‘s charter specifies a distinct membership
number, ranging from 30 to 50 members. For example, the charter for the
Small and Minority Businesses Committee states that it ’consists of
approximately 35 members,“ while the charter for the Chemicals and
Allied Products Committee specifies approximately 50 members. Further,
while for some trade advisory committees managed by other agencies the
charter states that these numbers represent a maximum, this is not the
case for the committees that Commerce administers. Even if the numbers
specified in the charters do not represent an absolute ideal, our
conclusion that the trade advisory committees were at 49 percent of
their authorized capacity in fiscal year 2001 highlights the ample room
available on the committees that could be used to fill gaps in
representation.
17. We appreciate that Commerce provided us with current membership
numbers as of August 2002, although the scope of our document review
was through fiscal year 2001 (September 30, 2001). We note that
according to these current membership numbers, at 48.3 percent of
charter levels, the committees administered by Commerce remain just
below half of their authorized capacity, and well below the 55 percent
of capacity they had reached in fiscal 2000.
18. We recognize Commerce‘s efforts to recruit new members and have
updated the report to reflect them more fully. These efforts may
alleviate the difficulties of maintaining robust and representative
membership, concerns that both Commerce and USTR officials expressed
during our review.
19. Commerce believes that the draft report‘s treatment of the issue of
nonbusiness participation may be somewhat misleading and states that
the report should contain a more detailed and specific discussion of
the congressional delegation in Section 135 of the Trade Act of 1974,
particularly in distinguishing the functions and makeup of each of the
three ’tiers“ of committees. We believe this report‘s treatment of the
nonbusiness issue is fair and accurate and note that appendix II of our
draft report contains a detailed discussion of the functions and
committee structure for each tier.
20. We recognize that many members expressed satisfaction with the
support provided to committees by USTR and other managing agencies,
including Commerce and USDA, and we have added language to this report
to that effect. However, certain members also expressed concerns about
overall leadership of the system and stated that delays or disruptions
associated with agency execution of administrative tasks such as
rechartering and new appointments were hindering the system‘s ability
to fulfill its statutory purpose. Our report already notes thatę unlike
USTR, USDA, and Laborę Commerce‘s ICP successfully avoided disruptions
in committee operations typically associated with rechartering. This
report has been updated to note that Commerce is taking steps to fill
administrative support needs by hiring additional staff. With the
renewal of trade promotion authority on August 6, 2002, the U.S.
negotiating agenda and resulting demands on the committee system are
likely to increase.
[End of section]
Appendix IX: GAO Contact and Staff Acknowledgments:
GAO Contact:
Kim Frankena, (202) 512-8124:
Staff Acknowledgments:
In addition to the person named above, Dennis Richards, Venecia Rojas
Kenah, Kay Halpern, Jon Rose, Janet Lewis, Sharla Draemel, Martin De
Alteriis, Richard Seldin, and Janey Cohen made key contributions to
this report.
FOOTNOTES:
[1] P. L. No. 107-210, 116 Stat. 933.
[2] The response rate to our survey was 72 percent, or 515 of the 720
members surveyed. Due to variations in response rates by committee, we
do not generalize the responses to all committee members. See the
technical survey methodology in appendix IV.
[3] P. L. No. 93-618, 88 Stat. 1996, codified at 19 U.S.C. § 2155.
Throughout this report, we refer to this provision as ’Section 135 of
the Trade Act.“
[4] For example, five members from each House are formally appointed,
as required by Section 161 of the Trade Act of 1974, as official
congressional advisers on trade policy. Furthermore, a provision in the
Trade Act of 2002 required establishment of a Congressional Oversight
Group, one of whose purposes is to closely coordinate with USTR at all
critical periods during trade negotiations and regarding ongoing
compliance with and enforcement of trade agreements.
[5] 19 U.S.C. § 2155(j).
[6] P.L. 96-39, 93 Stat. 308.
[7] 19 U.S.C. 2155(i).
[8] 5 U.S.C. App. §§ 1-14.
[9] 19 U.S.C. § 2155(f).
[10] 5 U.S.C. App. § 5(b)(2).
[11] Subsequent to our survey, Department of Defense officials told us
that the Defense Policy Advisory Committee on Trade, a second tier
committee whose charter expired in 2001, would not be reconstituted. In
July 2002, USTR officials said rechartering of the committee is being
considered again.
[12] The Committee of Chairs of the ISACs and IFACs was established to
advise the Secretary and the USTR on trade matters of interest common
to the ISACs and IFACs, and comprises all the ISAC and IFAC chairs.
[13] Travel costs vary widely by location and depend on advance notice.
According to a committee member based in Sacramento, California, the
estimated cost for a recent meeting was about $1,000 for a flight, two
nights‘ lodgings, and related expenses. Another member reported that a
round-trip ticket from Chicago to Washington, D.C., given short notice
of a meeting, cost $1,600.
[14] According to Commerce officials, 29 members resigned, 28 were not
invited to rejoin their committees, and 309 accepted invitations to
continue their membership.
[15] See appendix II for an expanded discussion of the legal issues on
representation of nongovernmental organizations.
[16] The number of meetings is approximate, because General Services
Administration reports and agency documents occasionally conflict on
the number of meetings a committee held in one year.
[17] Between 1980 and 1996, USTR imposed a blanket closure every 2
years on all private sector advisory committee meetings that would take
place in that period. However, in Public Citizen v. Barshefsky, 939 F.
Supp. 31 (D.D.C. 1996), the court found that USTR‘s 1996 to1998 blanket
closure was inconsistent with the Trade Act and conflicted with
Congress‘ presumption of open meetings. USTR now determines meeting
closure on a case-by-case basis.
[18] FACA uses the term ’designated federal official“ to indicate an
agency representative with responsibility for attending each committee
meeting. In this report, we use the term to mean the agency
representative responsible for attending the meetings, although the
title may differ by agency.
[19] Since October 2001, only restricted meeting minutes are prepared
for the first-and second-tier committees.
[20] Documents for ad hoc meetings in August and September 2001 were
not available for our analysis.
[21] Commerce indicated in agency comments that the number of requests
for comment in fiscal year 2001 was slightly higher, at 84.
[22] We asked the committee members to rank their level of satisfaction
or dissatisfaction in several areas. Respondents could choose among
seven possible responses: ’very satisfied,“ ’generally satisfied,“
’neither satisfied nor dissatisfied,“ ’generally dissatisfied,“ ’very
dissatisfied,“ ’not applicable,“ or ’no answer.“
[23] Of the remainder, 37 percent reported that consultations were
scheduled appropriately to a ’moderate extent,“ and 8 percent did not
answer the question (see app. IV, question 6).
[24] USTR did provide five briefings on the agreement to all trade
advisers in which one or two ACTPN staff liaisons participated in the 4
months leading up to the October 2000 agreement.
[25] The Department of Commerce has recently improved the comfort and
convenience of its reading rooms by incorporating them as part of its
new committee meeting facilities.
[26] The USTR briefly mentioned the report in the ACTPN‘s March 1,
2000, meeting but did not solicit comments on it. It should be noted
that discussions relating to an item on the agenda for that meeting--a
letter on a potential congressional vote on continued participation in
the WTO--suggest that the committee supported continuation of U.S.
participation in the WTO.
[27] The second-tier committees, and particularly the Intergovernmental
Policy Advisory Committee and the Labor Advisory Committee, had low
response rates. Consequently, the results reported by survey
respondents in those tiers and committees might not be representative
of all the members of those tiers and committees.
[28] All but two of the Labor Advisory Committee respondents had
attended steering committee meetings in the past year.
[29] All TEPAC members responding to our survey reported that their
committee had ’mixed“ or ’different“ views on trade policy; no member
reported that the committee had similar views. In comparison, about
half of the other respondents to our survey stated that their committee
members held similar views on trade policy.
[30] The 10 committees are ISAC 1, ISAC 3, ISAC 4, ISAC 5, ISAC 6, ISAC
9, ISAC 11, ISAC 14, IFAC 4, and the ATAC on Fruits and Vegetables.
[31] 19 U.S.C. §§ 2155(e), 2902 (e)(4).
[32] P. L. No. 107-210, 116 Stat. 933.
[33] We used calendar year 2000 data in our analysis because at the
time of our study it was the most current year for which complete
annual trade data were available.
[34] However, USDA officials applied a more selective process in
choosing members for its tier-2 agricultural policy committee, focusing
on representative interests and a membership ceiling of about 35
advisers.
[35] In its August 2002 comments on our draft report, Commerce reported
that it was taking steps to fill the void in representation of the
software industry.
[36] USDA does not prohibit membership of foreign-owned companies,
though internal procedures and rules indicate that this factor can be
taken into consideration in the nomination review. In practice,
however, foreign-ownership was not considered in the most recent
rechartering of USDA‘s six committees because USDA‘s application
materials did not request information on ownership.
[37] Although neither Section 135 of the Trade Act nor agency
implementing procedures and rules limit the number of committees that
may be formed for tiers 2 and 3, executive order 12838 places some
restrictions on the overall number of advisory committees subject to
FACA. The legislative history of Section 135 indicates that at least in
1974, Congress thought that approximately 30 advisory committees might
be sufficient. S. Rep. No. 93-1298, at 102 (1974); H.R. Rep. No. 93-
571, at 38 (1973). Furthermore, the legislative history of the 1979
amendments to Section 135 show congressional intention to substantially
reduce the number of committees from the 45 that were operating at that
time. S. Rep. No. 96-249, at 259 (1979); H.R. Rep. No. 96-317, at 188
(1979).
[38] Some consolidation of the agriculture committees in the mid-1990s
eliminated technical advisory committees on oilseeds and processed
foods. The committee on intellectual property rights was created in
1986.
[39] Northwest Ecosystem Alliance v. USTR, Civ. No. C99-1165R (W.D.
Wash. 1999); Washington Toxics Coalition v. USTR, Civ. No. C00-0730
(W.D. Wash. 2001).
[40] 5 U.S.C. App. § 5(b)(2).
[41] 67 Fed. Reg. 12969-70 (Mar. 20, 2002).
[42] A White House official indicated to us in early September 2002
that over 100 candidates had been considered for the more than 35
vacancies on the committee, that the President had approved a list of
persons whom he intends to appoint, and that these persons were
presently undergoing the full background investigation associated with
a presidential appointment. USTR‘s security clearance process will not
begin until after this background investigation is complete.
[43] Aspects over which agencies have limited control include the
information required on standardized forms, the time it takes members
to return paperwork, and the time it takes the Office of Personnel
Management (OPM) to complete a background investigation.
[44] For instance, the Department of Commerce conducts the major
portion of its internal vetting of candidates concurrently with the
security clearance process, resulting in the most timely appointment
process of the three agencies. Commerce also sends the membership
applications to the various offices required for internal vetting at
the same time, rather than sequentially. Members of committees
administered by USTR and USDA, on the other hand, only begin undergoing
security clearance procedures at the conclusion of the full internal
vetting period, which can also be quite time consuming. Both USTR and
USDA, however, have offered interim clearances to appropriate
candidates, which allow them to participate pending the outcome of the
investigation. Although Commerce uses this procedure for its employees,
it has not adopted the procedure for committee members. Commerce
officials said they are exploring the possibility of interim clearances
for future appointments.
[45] According to USDA, the rechartering process was also delayed due
to the change in administration and pending arrival of senior agency
officials.
[46] U.S. General Accounting Office, Human Capital: Major Human Capital
Challenges at SEC and Key Trade Agencies, GAO-02-662T (Washington,
D.C.: April 23, 2002).
[47] One FTE is equal to one person working full-time; two people
working half-time; one person working half-time and two people working
one-quarter-time, etc. A fraction of several employees‘ time can add up
to half of an FTE.
[48] This does not include the time that negotiators spend briefing and
discussing issues with committee members. We estimate that committee
members themselves collectively spent about 4,320 hours of their time
last year attending meetings. Our estimate assumes that half of the 720
members who attended meetings last year attended an average of 3
meetings that lasted an average of 4 hours.
[49] Members of the Advisory Committee for Trade Policy and
Negotiations (ACTPN), the Trade and Environment Policy Advisory
Committee (TEPAC), and the Intergovernmental Policy Advisory Committee
(IGPAC) are permitted to appoint one or more staff liaisons to help
them prepare for and participate in committee deliberations. These
liaisons have clearances and meet on their own; some also participate
in member meetings.
[50] These codes are available at dataweb.usitc.gov.
[51] Although services data were all grouped under the Services
Industry Sector Advisory Committee (ISAC) 13 group, some services trade
may be covered by ISAC 6 (Energy), ISAC 7 (Ferrous Ores and Metals),
and ISAC 17 (Wholesaling and Retailing) groups. The data available did
not allow the level of disaggregation needed to assign portions of
overall services trade to these groups.
[52] 5 U.S.C. App. §§ 1-14.
[53] Id. § 5(b)(2).
[54] 41 C.F.R. § 102-3.
[55] Id. § 102-3.60(b)(3).
[56] National Anti-Hunger Coalition v. Exec. Comm. of the President‘s
Private Sector Survey on Cost Control, 711 F.2d 1071, 1074n.2 (D.C.
Cir. 1983).
[57] H.R. Rep. No. 92-1017, at 6 (1972).
[58] P. L. No. 93-618, 88 Stat. 1978 and following.
[59] 19 U.S.C. § 2155(f)(2).
[60] Northwest Ecosystem Alliance v. USTR, No. C99-1165R (W.D. Wash.
1999). The other court did not directly address this issue.
[61] 19 U.S.C. § 2155.
[62] Section 135 has been amended several times over the years to
broaden the purposes for which trade advisory committees provide advice
to executive branch officials and to increase the kinds of committees
that are to be established. For example, the 1979 amendments added the
’operation of any trade agreement once entered into,“ and ’other
matters arising in connection with the administration of trade policy
of the United States“ to the matters on which the President should seek
advice from the trade advisory committees. These amendments also added
’services“ to the tier-2 and tier-3 committees that should be formed.
P. L. No. 96-39, 93 Stat. 308-10. The 1994 amendments added
’nongovernmental environmental and conservation organizations“ to the
list of interests required to be on the tier-1 committee. P. L. No.
103-465, 108 Stat. 4836.
[63] The three-tier structure is the term commonly used to describe the
three different kinds of committees. It should be emphasized, however,
that section 135 neither establishes any formal relationship among the
three different kinds of committees nor specifically authorizes the
first tier to exercise any control over the other two tiers.
[64] 19 U.S.C. § 2155(b).
[65] Id. § 2155(c).
[66] S. Rep. No. 93-1298, at 101-02; H.R. Rep. No. 93-571, at 38.
[67] P. L. No. 96-39, 93 Stat. 308-10.
[68] S. Rep. No. 96-249, at 259.
[69] H.R. Rep. No. 96-317, at 187-88. This comment was made partly
because of the initial failure to include a major, well-recognized farm
group in the agricultural advisory process.
[70] For example, the U.S. Court of Appeals for the District of
Columbia rejected (1) a fair balance challenge to membership on an
advisory committee appointed to study social service programs, which
was brought by individual recipients of federal food assistance
benefits and an anti-hunger coalition, and (2) a fair balance challenge
to membership on an advisory committee established to provide advice
and recommendations on development of microbiological criteria for
foods, which was brought by various public interest and consumer
groups. National Anti-Hunger Coalition v. Exec. Comm. of the
President‘s Private Sector Survey on Cost Control, 711 F.2d 1071, 1074-
75 (D.C. Cir. 1983); Public Citizen v. National Advisory Comm. on
Microbiological Criteria for Foods, 886 F.2d 419, 423-24 (D.C. Cir.
1989)(Per Curiam). See also Cargill, Inc. v. United States, 173 F.3d
323, 336-39 (5TH Cir. 1999). (The court rejected a fair balance
challenge by mine owners to composition of the National Institute for
Occupational Safety and Health‘s Board of Scientific Counselors.)
[71] In an earlier action brought by domestic electronics producers,
which challenged the composition of the industry sector advisory
committee for electronics and instrumentation, the U.S. Court of
International Trade held that there was no statutory requirement that a
representative from any specific industry be included in any of the
advisory committees established under section 135. Kemet Electronics
Corp. v. Barshefsky, 969 F. Supp. 82, 87 (Ct. Int‘l Trade (1997).
[72] No. C99-1165R (W.D. Wash. 1999).
[73] Both the plaintiffs and the U.S. government defending agencies
agreed that the industry sector advisory committees involved were
subject to FACA‘s balanced representation requirement and that the
proper test was whether a committee‘s members represent a fair balance
of viewpoints given the functions to be performed. Id.
[74] Northwest Ecosystem Alliance v. USTR, No. C99-1165R (W.D. Wash.
Nov. 8, 1999). This was soon followed by an order requiring USTR and
the Department of Commerce to name interim environmental
representatives while the appointment process was being completed.
[75] Brief for Appellants, Northwest Ecosystem Alliance v. USTR, No.
00-35060 (9TH Cir. Mar. 23, 2000).
[76] Civ. No. C00-0730R (W.D. Wash. 2001).
[77] Civ. No. 01-0018 (D.D.C. Jan. 4, 2001).
[78] Id. (D.D.C. May 8, 2001). The court found that the chemical
committee members did not have standing because they failed to show an
injury that was ’actual or imminent, not conjectural or hypothetical,“
and could cite no authority for their contention that consensus of
opinion on the chemical committee was required.
[79] Id. This decision was appealed, but the appeal was dismissed at
the request of the chemical and allied products committee members who
brought the case. Gamble v. USTR, No. 01-5236 (D.C. Cir. Aug. 17,
2001).
[80] 67 Fed. Reg. 12969-70 (Mar. 20, 2002).
[81] Until 2002, USDA granted clearances for 5 years.
[82] See Appendix I for a discussion of the information and data we
used to identify the goods and services represented by individual tier
-3 committees.
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